19 Sep '16, 3am

S&P: Smaller developers could face liquidity squeeze - STProperty

S&P: Smaller developers could face liquidity squeeze - STProperty

Singapore's real estate sector forms a big part of outstanding domestic bond issuance, hence scrutiny of the sector is intensifying after the fallout of Swiber Holdings, a marine engineering company. In a report published on Wednesday, S&P Global Ratings said that the overall real estate sector remains resilient but small developers may face liquidity squeeze, making them more vulnerable to repayment risks on outstanding bonds. The bigger developers are the largest issuers of bonds maturing in the sector in the next 24 months, thus repayment risks may not be as high. Meanwhile Reits, with their stable recurring cash flows, lower leverage, and large proportion of unencumbered assets, are more flexible financially than developers. Of the total S$60 billion of outstanding bonds issued by Singapore listed entities as of Aug 31, real estate developers and Reits make up about 52...

Full article: http://www.stproperty.sg/articles-property/singapore-prop...

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