Briefs

The government has announced temporary relief measures for the property market which has been affected by disruptions to construction timelines, operations at sales galleries, and home viewings. This is caused by the extension of the “circuit breaker” measures until June 1. The relief measures are implemented with immediate effect.

A six-month extension is given for the project completion period (PCP) for residential, commercial, and industrial development projects, including foreign housing developers under the Qualifying Certificate (QC) regime.

In addition, a six-month extension will be given for the commencement and completion of residential projects, as well as the sale of housing units in residential developments in relation to the remission of the additional buyer’s stamp duty (ABSD) for housing developers. For all extension cases, eligible developers will be notified by the respective agencies and no application is necessary.

Local married couples will also receive a six-month extension for the sale of the first residential property in relation to the remission of ABSD for the purchase of their second residential property in Singapore. The application for ABSD remission must be made within six months after the date of sale of the first residential property.

The government says that it remains committed to ensuring that private residential prices remain broadly consistent with economic fundamental, and the new relief measures do not alter other existing residential property market cooling measures. — Timothy Tay

Supermarket sales surge amid wider retail slump

Singapore’s total retail sales value fell 13.3% y-o-y to $3.3 billion in March, following the implementation of safe-distancing measures to curb the spread of the coronavirus. This deepens the 8.4% decline registered in February, according to data released by the Department of Statistics (Singstat) on May 5.

Motor vehicle sales dropped 28.2% y-o-y, compared to a 1.3% expansion seen in February. Other declining industries in March included apparel and footwear (-41.6%), watches and jewellery (-34.4%), medical goods (-21.9%) and recreational goods (-20.6%).

Aside from this, supermarkets and hypermarkets — which saw long snaking queues in March — bucked the declining trend with a 35.9% rise in sales as demand for groceries rose as more people stayed home. However, this rise was not extended to other food services such as caterers and restaurants, which saw takings plunge 58.1% and 30.3% respectively.

UOB economist Barnabas Gan calls the data “worrying”, since retail sales deepened prior to the start of the “circuit breaker” measures restricting operations of non-essential activities from April 7. He expects the index to remain in the red, with contractions by the same or even greater margins in April and May as a result of the circuit breaker.

OCBC chief economist Selena Ling predicts the current 2Q2020 will see the index dip 15.4%, but with some recovery to a contraction of 4.0% in 3Q2020 as the circuit breaker measures are lifted gradually. Still, the resumption of economic activities is likely to stay muted. As such, she predicts the index will only reverse to the black in 4Q2020 with 1.8% growth. — Amala Balakrishner

ARA ventures into FinTech with Minterest acquisition

ARA Asset Management and its group CEO, John Lim, have jointly acquired a majority stake in Minterest, a Singapore-based online crowdfunding platform, which is open to retail investors looking for an alternative means to invest in real estate.

“Investors can rest assured that the deals presented to them are endorsed by a reputable fund manager. We looked at a wide range of different potential partners and chose Minterest because they are the best,” said Lim on May 5.

ARA Group will jointly acquire a 52.08% stake in the three-year-old FinTech firm with JL Family Office, a holding company for firms founded by Lim, who will take on an additional role as Minterest’s chairman.

“With ARA’s strong backing, we will be able to enlarge our user base, develop more products to provide alternative investment options to retail investors, especially at a time where interest rates are expected to stay lower for longer,” says Minterest CEO Charis Lau.

Besides providing easier access to crowdfunding and predictive analytics, ARA also hopes to use Minterest’s experience with “tokenisation” to develop secure digital assets on blockchain systems that can be sold to investors in the form of distributed shares, providing what Lim calls “another playground for retail investors”.

“Traditionally, investors who want to own real estate would have to acquire the physical property or invest in REITs. Today, technology has opened the doors to real estate investment in exciting new ways,” says Minterest’s chief commercial officer and APM director of fintech, Janice Koh. “Crowdfunding is an increasingly popular way for developers to access the working capital required for development projects and for investors to achieve attractive risk-adjusted returns without the need to come up with a large amount of capital.”

ARA and Minterest also announced that they will launch their first real estate secured mezzanine debt financing product on May 15 by way of co-investment with Straits Real Estate, giving investors the chance to participate in the secured mezzanine debt financing of a 64-level, high-rise residential development project in Melbourne’s CBD. Minimum investment amounts will start at $5,000 and be made available for short tenure. — Ng Qi Siang