Daily Briefing: Broadcom retreats to US after Qualcomm drama; Direct sales could boost commercial property recovery

And O&M firm Gaylin Holdings receives a US$100m investment and completes restructuring.

From iCompareLoan via Yahoo! Finance:

The lull is over for Singapore's commercial spaces. Prices increased 1.8% QoQ in Q4 2017, and they are expected to go higher in 2018. iCompareLoan discussed that despite costs of maintaining commercial spaces, small supply and strong demand can drive up the asset value of strata commercial spaces, making them worthwhile buys.

"In land-scarce Singapore, strata-titled shops/offices are in limited quantity because most of the commercial spaces are owned by real estate investment trusts (REITs), and many of these REITs are in turn owned by the Government through proxies. As of 4Q2011, the supply of strata-titled offices in Singapore is estimated to be of 11.05 million sq ft, making up 14.2% of the total office stock (Bright Spot in Singapore Property Market: Strata-titled Office, Colliers International,pg 2). The stock of strata-titled shops also faces a similar small supply.

In addition, the slew of regulations in the residential market has diverted investors’ attention to the commercial sector. Together with today’s low interest rate environment, the two have fuelled demand. Thus investors can make capital gains through direct sales."

Read more here.

From Reuters:

After US President Donald Trump blocked Singapore-based chipmaker Broadcom's takeover of Qualcomm, the company still plans to redomicile to the US.

"Broadcom’s board was meeting on Tuesday night to formalize its plans and it could make an announcement as soon as Wednesday, the two sources added. The company will also drop its challenge to Qualcomm’s board, the people added.

Broadcom will continue with its plan to redomicile to the United States, a move that will cost it about US$500m a year under a higher tax rate, the sources added.

Being based in the United States as opposed to Singapore will allow Broadcom to make what it believes will be acquisitions of U.S. companies that will not fall within the jurisdiction of the Committee on Foreign Investment in the United States (CFIUS), which scrutinizes deals for potential national security concerns."

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From Deal Street Asia:

Offshore and marine services firm Gaylin Holdings Ltd has completed a US$100m investment and debt restructuring organised by the ShawKwei and Partners, which has now increased its stake in the Singapore-listed company to 76%.

"The move seeks to provide loss-making Gaylin with 'financial stability and positioning it for future growth,' an announcement said Tuesday. As part of the restructuring, ShawKwei has purchased new Gaylin shares worth $68m (US$52m). Together with the equity investment, Gaylin restructured bank debt facilities totalling $64m ($48m) by extending repayment dates and adjusting covenants. For the restructuring of bank loans, UOB, OCBC, CIMB, and RHB were involved as the largest lenders to Gaylin."

Read more here.