iProperty.com enters Indonesia with 2 major acquisitions

IPGA Ltd (ASX: IPP), the owner of Asia’s No. 1 network of property portal sites under the iProperty brand, today announced that it has agreed to acquire PT Web Marketing, owner and operator of Indonesia’s largest property portal www.rumah123.com. Simultaneously IPGA Ltd has also agreed to acquire the number three ranked property portal in Indonesia, www.rumahdanproperti.com.

Rumah123.com is Indonesia’s largest and most established property portal. Based in Jakarta and with a staff of more than 50, rumah123.com is the only Indonesian property portal to have successfully rolled out a paid advertising model with more than 1,200 real estate agents purchasing a monthly subscription and another 4,000 agents in the database. In addition rumah123.com also generates revenue from property developers and display advertisers. The website contains more than 50,000 listings (within the last quarter) and is visited each month by 160,000 unique browsers*.

Rumahdanproperti.com is the number 3 ranked portal in Indonesia. It has an additional 2,200 agents, 15,000 property listings and an additional audience of 100,000 unique visitors per month*.

Shaun Di Gregorio, the CEO of IPGA, commented: “Following our success in Malaysia, Singapore and Hong Kong, we identified Indonesia as a natural growth market for the business. Research shows that Indonesia is undergoing strong economic growth and there is now more than US$100 million per annum being spent on property advertising and a rapidly growing Internet audience of more than 30 million.”

“To ensure the best chance for long term value creation, we simultaneously targeted acquiring the clear market leader in rumah123.com and the #3 player, rumahdanproperti.com. Together this provides a clear leadership position similar to the one we enjoy in the rapidly growing Malaysian market,” continued Di Gregorio.

“We will consolidate the operations of the two sites while providing agents, property developers and display advertisers with unparalleded access to the largest audience of property hunters in Indonesia. Additionally consumers will will have access to the largest range of listings in Indonesia. Combined with our market leading sites in Malaysia, Singapore and Hong Kong and our investments in India and the Phillipines, IPGA continues to lead the way as Asia’s number 1 network of property portals” commented Di Gregorio

IPGA Ltd has agreed to acquire PT Web Marketing for AUD1.0 million in cash and, subject to shareholder approval, 7.0 million shares in IPGA Ltd upon completion. IPGA will acquire ‘rumahdanproperti.com’ for AUD300K in cash upon completion and an additional AUD200K in cash within twelve months of completion based upon certain performance criteria being met. Completion for both acquisitions is targeted to occur by June 30th, 2011.

*Source: Google Analytics

Singapore and China Push Asia’s Office Rents Up

The Asia Pacific economy continues to boom and shows no signs of slowing down. As companies flock to the ‘it’ region, Asia’s property industry, or more specifically the office space sector, flourishes. Office rental rates have been climbing up steadily, and are set to remain on the rise for a while.

However, according to data from CB Richard Ellis, Singapore’s growth for the first quarter of 2011 was 3.0% – a slight slowdown when compared to the fourth quarter of 2010, which recorded a 3.6% growth. The rate of rental growth, while positive, declined from 12.2% to 3.6% this quarter.

(Singapore’s Central Business District. Image courtesy of Singapore Tourism Board and Singapore in Pixels Photo Contest.)

Could Asia be losing its steam?
It seems unlikely, as the slowdown of rental growth can be pegged to a couple of factors.

First, the previous quarter’s higher growth could be attributed to occupants snatching up spaces in 2010’s office market revival. This double-edged sword means occupants are now ‘digesting’ the space they have taken up, filling up the office spaces and putting a pause on extra renting. Further pressure comes from cost-cutting mindsets that firms have developed in the aftermath of the Global Financial Crisis.

The second factor in the relatively recent downward trend of commercial real estate rental was the earthquake and tsunami that hit East Japan. Relocation plans have been put on hold as the Land of the Rising Sun sees a quarterly drop of 1.6% in office rents. It is safe to say that residual impacts will continue emerging in months to come.

Despite the overall slump of the Asian office market, three countries seem to be maintaining popularity: China, India and Singapore. China, for instance, single-handedly spearheaded Asia’s growth for the first quarter of 2011. It was responsible for more than half the new demand in the Asia Pacific region. Limited office space in the cities of Beijing, Taipei and Hong Kong mean that office rents will continue to increase.

Such is also the case in Singapore, where limited supply faces increasing demand for offices from the likes of United Overseas Bank, RHB Islamic Bank, CIMB, BNP Paribas and other companies seeking to expand their operations here. Other highly sought-after destinations in Asia include China, Hong Kong, Australia and India.

With the twin drivers of a growing demand from companies to penetrate and capture new markets in Asia, and a limited land supply due to space constraints of Asian metropolises, the slow growth is a small bump on Asia’s road to economic development and growth, as office rents are poised to pick up speed in the near future.

Where to invest in Q2 2011?

We recently published the second edition of our property barometer, a quarterly report that offers a summary and analysis of the key property markets around the world for foreign investors. We have identified several markets to watch for this quarter and have made some suggestions on which ones you should take a rain check on.

In Q2 2011 we still remain optimistic about the London property market with mortgage financing becoming more competitive. Although interest rates are likely to increase in the second half of the year, there is still a huge under supply of real estate in London and overseas investors are now accounting for 48% of all prime central London property. Rents are at an all time high and supply levels are at and all time low, so it still makes for a very interesting market to buy in over the coming months.

Moving on to the US, we remain very confident about the New York and Jersey City market. Capital values in Jersey City are still 50% below their peak in January 2007. In Jersey City, just across the water from Manhattan, property is trading in the region of 25 – 30% of New York prices, with very strong rental yields, great transport infrastructure giving speedy access to Wall Street and downtown Manhattan. We have had lots of interest from our clients into Jersey City with properties selling faster than in Manhattan, inventory levels continually low and high yields of 6%.

Closer to home in Asia, we are still very confident about the Kuala Lumpur market as the government continues to implement economic stimulus packages, and forecasts capital value growth rates of between 7 to 10% this year. The Malaysian property market is also benefiting from a somewhat ‘lack of regulation’ compared to Singapore, Hong Kong and China.

Heading to Europe, the volume of sales to foreigners was up 40% in 2010 in Turkey. There has also been massive growth in the construction sector and the property market in Turkey has rebounded significantly compared to the rest of Europe. Property prices are set to increase with over 400,000 people immigrating to Istanbul every year which has created a housing shortage of 250,000 per annum. Turkey has the fastest growing economy in Europe, a trend that is likely to continue after Istanbul won European City of Culture in 2010, which is expected to attract significant inward investment over the coming months.

The regulations certainly slowed up the Singapore market significantly in the first quarter of the year. GDP has slowed from incredible growth in 2010 and developers are now releasing considerably less residential projects.  We are still very favourable on the Singapore economy and we are looking for value in the real estate market but in the industrial sector rather than the residential. Industrial property is capable of achieving high rental yields of 4 – 6% with the cost of borrowing low at just 1% making it a very attractive investment market. We believe the Singapore industrial real estate sector to be one of the key markets to watch this quarter.

Further afield, Australia is having a tough time with a 30 plus year high for currency, interest and inflation which collectively are  challenging the sale of property. As such we are starting to see a slight correction in the market as property becomes quite expensive to hold given the cost of funding. As a result we believe we will see quite a sluggish second half of the year in Australia.

During the remaining months of this quarter we would advise seeking out investment opportunities in London, New York and Malaysia whilst keeping an eye on the up and coming real estate markets of Turkey and Singapore’s industrial sector. For the reasons stated earlier, we advise to avoid the Australian property market during this quarter.

To find out more about Tim Murphy and investing in global real estate click here or contact IP Global.

Are Serviced Apartments Really Any Different To Hotels?

Luxurious and plush but often characterless. Hotel rooms never quite manage to capture that homely feel that can make a stay so much more relaxing and that’s why I decided to test out serviced apartments when I recently relocated to Singapore. Surely they must offer something different?

Orchard Parksuites Singapore www.wotif.com

Orchard Parksuites Singapore www.wotif.com

Basing myself at the Orchard Park Suites serviced apartments while looking for a more permanent residence, I was pleasantly surprised. That cosy, welcoming feeling of a home greeted me when I first looked around. It was hard to pin-point but perhaps the open space as well as distinct rooms and a fully equipped kitchen made it feel like somewhere liveable. Whatever it was, it was significantly different to the predictable shells known as hotel rooms.

Located near Orchard Road, I was close by to all the essentials including shopping, restaurants and the MRT. I soon got to grips with the area and realised that Ngee Ann City shopping centre was for the echelons of high society while Lucky Plaza was where the bargains could be had. Lucky indeed, if your bartering skills were intact. Almost every shop you could ever imagine was in the area from gigantic bookstores to English supermarkets. After trouncing around Orchard Road, coming back to my Singapore serviced apartments was noticeably better than arriving back to a hotel room. It felt comfortable, and with the kitchen facilities I could actually buy food from outside and bring it back with me like I would at home.

Orchard Road Singapore  www.wotif.com

Orchard Road Singapore www.wotif.com

As an unexpected bonus the apartment came with complimentary broadband and after looking up the history of Orchard Road I discovered it was named that way because the road was lined with nutmeg orchards back in the 1830s. Peeking out my window revealed that wasn’t the case anymore but for a bit of nature I wasn’t too far from the parks and golf courses via the efficient MRT. I had booked the apartment at Orchard Park Suites through Wotif.com and after a brief chat to the customer service team they kindly offered me a discount because of my lengthy stay.

After staying for almost two months I eventually found my own place but the interim time wasn’t an ordeal, in fact I was fond of the apartment. Serviced Apartments are definitely also good options if you are relocating to Singapore while looking to rent, or if you’re looking for the next property, as they offer short term stays.  If I were to do the whole thing again I’d sidestep Singapore hotels for a prolonged stay like this although I would consider Singapore boutique hotels because these have character in abundance… just perhaps not the sort of character I would like to live in for a while.

Why Did Mah Bow Tan Retire?

Did Minister for National Development Mah Bow Tan relinquish his role to appease dissatisfaction with rising housing prices?

The increasing cost of housing has been a much-debated topic of late. The policy by the People’s Action Party (PAP) to make housing not just a living space, but also an asset, came under fire from opposition parties. Following a tough fight for the hearts and votes of Singaporeans in the General Elections earlier this month, PAP emerged victorious; the mandate, though waning, remained strong. Yet Prime Minister Lee Hsien Loong announced a Cabinet reshuffle on Wednesday that sees Mah and two others voluntarily resigning from their posts. Why then did Mah, together with Minister for National Security Wong Kan Seng and Transport Minister Raymond Lim, step down?

(What will Minister for National Development Mah Bow Tan’s retirement mean to housing policies? Image courtesy of Eugene Tang and Singaporesights.com)

One possible explanation is that PAP wants to show disgruntled Singaporeans that the Government pays attention to their needs. In a survey conducted by Reach prior to the elections, around two-thirds of respondents expressed concern over the cost of living in Singapore, while half found public housing unaffordable. Measures implemented by the Government to cool the property market managed to slow demand, but prices remain high and lower-income households still find it difficult to keep up with living costs. As such, Mah’s retirement may be the consequence of the perceived inability of the ministry under his leadership to produce affordable housing. Former nominated MP Zulkifli Baharuddin has observed a pattern of less popular ministers with lower vote percentages retiring. “If you look at the three, they have some of the lower percentages. PM Lee is really making ministers accountable” he told The Straits Times. Mah’s departure could also signify an end to a dated governing style and – together with PAP’s new batch of office holders – herald a move towards a more engaging approach to governance.

Meanwhile, former Minister for Health Khaw Boon Wan has inherited Mah’s role as Minister for National Development. The million-dollar question now is what this Cabinet reshuffling will translate to in terms of housing policies. It seems likely that new policies – partially stemming from pressure by the six Workers’ Party members seated in Parliament, who have promised strides towards affordable housing – will be implemented to either lower housing prices significantly, or make it such that struggling families can afford them.

One possible solution is to raise the income ceiling for families buying directly from HDB. Currently, families who earn more than $8,000 are unable to purchase direct from HDB, while those earning between $8-10,000 can only purchase DBSS flats. The ‘sandwich class’ – those with slightly higher incomes unable to purchase direct from HDB or qualify for direct loans from the government  – would thus qualify for HDB units and avoid unnecessary loans and debts.

Whether these policies will be introduced, and what such changes will mean to the property market in Singapore remains to be seen. What is clear is that affordable housing has become a, perhaps the most, important domestic issue facing Singaporeans today.

Property buyers to benefit from partnership between iProperty.com & Property Buyer

The iProperty.com Group, Asia’s No.1 online property group, has entered into a partnership with property and lifestyle magazine, Property Buyer, to enhance the magazine’s property listing content in both its Malaysia and Singapore editions. Extending iProperty.com’s reach to offline readers, this monthly magazine will continue to offer extraordinary stories of ordinary people buying, selling and improving their properties.

Presented exclusively by iProperty.com in association with Property Buyer, both editions will offer more than 1,000 properties monthly for sale and rent. In Singapore, iProperty.com will also contribute editorial content, giving readers updates on market news and trends.

“We’re thrilled with our mutually beneficial relationship with Property Buyer. We are always looking for new ways to give our customers additional value for their subscription and by joining forces with Property Buyer magazine, we are able to give our customers in both Singapore and Malaysia exposure to new and relevant audiences,” said Shaun Di Gregorio, Chief Executive Officer of the iProperty.com Group.

Edwin Wong, Managing Director of Property Buyer adds, “With the additional content provided by iProperty.com, we are able to expand our offering to readers and help them make informed decisions about their most important investments.”

Over 20,000 copies of Property Buyer are distributed in Malaysia and Singapore every month, reaching audiences comprising primarily business owners, senior management and PMEBs. The publication is available at leading bookshops, newsstands and petrol kiosks.

[Read more…]

iProperty Survey: Home-buying decisions impacted by recent housing cooling measures

iProperty.com Singapore survey results reveal key concerns plaguing local home buyers.

iProperty.com, Singapore’s leading property website, announces key findings of its Consumer Property Sentiments Survey 2011, highlighting key sentiments from respondents in Singapore to recent cooling measures to the property market.

Key findings from the survey reveal that:

1.  59.2% of survey respondents say that they are affected by the cooling measures, and are either modifying their property buying/selling/renting decisions accordingly, or are halting plans to buy/sell their properties at this current moment.

2.  58.4% of survey respondents either do not think or are undecided whether the measures will succeed in cooling Singapore’s red-hot property market.

3.  58.7% of survey respondents do not think that these measures are sufficient to stabilise public housing prices and stated their hopes for more to be done to improve the situation.

Over 470 respondents comprising mostly Singaporeans, PRs and expatriates took part in the online survey from 27 Dec 2010 to 25 February 2011. The majority of survey respondents fall between the age group of 25 to 54 years, with 71.5% earning an annual household income of S$140,000 and below. Most of them are currently living in HDB flats, private apartments and landed property, of which more than half currently have plans to purchase or rent their next property.

In addition, in light of recent debates on housing policies around the General Elections, a quick online poll was conducted over a one-week period from 28 April 2011 to gauge public response. Over 50% of the 104 respondents indicated their hopes for more affordable housing by way of lowered prices for new flats and re-evaluation of asset enhancement policies.

Speaking on the results of the survey, Shaun Di Gregorio, Chief Executive Officer, The iProperty.com Group, “Housing policies and other property-related issues are arguably one of the key buzz topics of the upcoming General Elections. From this survey, there are indications that Singapore home buyers are looking forward to additional measures to bring about significant changes in the policies governing the local property market, so as to further cement their decision-making process.”

The next iProperty.com Singapore Consumer Property Sentiments Survey 2011 will be announced in June 2011.