Singapore Business Review
Will they meet the deadline?
Singapore’s listed developers and real-estate investment trusts face
their heaviest burden of near-term maturities on record just as home
prices drop.
According to a report by Bloomberg, the 80 property companies on
Singapore’s stock exchange reported a combined S$23.5 billion ($18.5
billion) of borrowings that have to be repaid within a year in their
latest filings, Bloomberg-compiled data show. The looming debt wall
comes as the vacancy rate for condominiums soared to the highest since
2006, pushing prices to the lowest in almost two years, according to
data from the Urban Redevelopment Authority.
Bloomberg adds that Savills Plc predicts refinancing for homebuilders
and REITs will be more challenging as Singapore’s economy slows, with
expansion cooling to 2.4 percent in the second quarter, from 4.8 percent
in the previous three months.
Population growth on the island is at a
10-year low and Standard & Poor’s expects home prices have further
to fall.
“We’re at that point in the cycle when every quarter you’re seeing
selling prices come down a little bit and secondary market transactions
aren’t very active,” Kah Ling Chan, a property analyst at S&P in
Singapore said. “I suspect we haven’t seen the bottom yet.”
Developers of residential homes are suffering not so much from lower
selling prices than “collapsed” sales volumes, said Alan Cheong, a
senior director of real-estate research at Savills in Singapore.
Secondary home sales plunged to the lowest since 2003 in the first
quarter, according to URA data, and as business slows, builders with
less pre-sales money to finish projects have to rely on loans, boosting
short-term borrowings, he said by phone Oct. 2.
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