Is it time to buy into Industrial REIT? The Earning Resiliency Of Mapletree Industrial Trust

In my last posting on whether is it time to buy into Industrial REIT, I have illustrated the poor rental charges of industrial properties using the JTC indexes from 2016 to 2018. All industrial property types pricing indexes with the exception of business parks have been in the doldrums. REITS with warehousing facilities such as Cache suffered the worst hit. The local warehousing space for logistics usage has not yet seen any significant recovery and prices still hover around S$1 per sqft in western Singapore relative to more than S$1.50 psf a few years back. The market climate remains challenging for industrial REIT due to the upcoming ready available supply of new industrial space.

I do not think that there are any hidden gems right now given the current operating environment and the recent run-up in most REITs pricing. The worrying global macroeconomic conditions may also further adversely affect this particular REIT segment.  The higher yield from industrial REIT solely lies in the higher risk premium associated with such class of assets. 

However, I have started selling off part of my other holdings (Singtel & Thai Beverage) and begin buying units in Mapletree Industrial Trust (“MIT”) at between S$2.01 to S$2.03. For this post, I will be skipping the historical financial performances review (which has been readily covered by analysts) and instead focused more on the future prospects of this REIT as well as the apparently more resilient earnings relative to other typical industrial REITS which should enable MIT to weather through any possible economic crisis better than its other rival industrial REIT. The main reasons for accumulating Mapletree Industrial Trust are due to the better quality properties in its stable of portfolio as well as their diversification into data centers segment which is a high in demand supporting segment for the new high tech digital economy. In addition, the close to 6% yield is a lot higher than my current weighted average portfolio return of 5.1% due to significant concentration in Retail REITs which are lower in terms of yield.

Background of MIT
MIT's portfolio comprises of 86 industrial properties in Singapore and 14 data centres in the United States of America (40% interest through the joint venture with Mapletree Investments Pte Ltd).

I have listed down some of the pull factors for investing into Mapletree Industrial Trust as per below:

(1) Mapletree has the backing of one super deep pocket and influential institutional investor

Mapletree has the full support of Temasek Holdings. Nothing much more needs to be said on what this means. The yield for MIT is thus lower relative to other Industrial REIT due to lower risk premium perceived by the market. The sponsor of MIT always seems to be able to get its hand on developing or acquiring many good quality properties. Another good example is Mapletree Commercial Trust ("MCT")  that is holding on to Vivocity and Mapletree Business City. MCT has been elevated to "God like" status recently on the stock exchange and its price seems to have re-rated as evident in its ever rising prices and consequently, yield demanded by investors drop to slightly below 5% from the re-rating on its risk profile and good track record in its financial performance.

(2) Data centres in US and also conversion of additional local property into data centre

The internet of things and cloud services will continue to drive demand for data centres in the new economy. The business strategy to focus more on high-value industrial sector will drive the future growth of MIT as well as enhance its earnings resiliency.

In October 2017, MIT and its sponsor, Mapletree Investments entered into a joint venture to acquire 14 data centres in the United States of America for US$750Mil on a 40: 60 shareholding basis. This vital strategic acquisition thus extends Mapletree group's footprint in the fast-growing data centre segment.

The data centres are located on freehold land and leased out to 15 high-quality tenants from a diverse range of industries such as telecommunications, information technology as well as financial services. The tenated properties have a long weighted average lease to expiry of around 5 years with fixed annual rental escalation of 2% embedded growth.

In Singapore, MIT will be converting and upgrading its 7 Tai Seng Drive industrial property into a data centre. This is in collaboration with Equinix Singapore as it expands its presence locally. This builds on Equinix's current presence at 26A Ayer Rajah and 180 Peachtree, Atlanta in the United States. The work at 7 Tai Seng Drive is expected to be completed by second half of 2019 and will contribute positively to the rental income of MIT.

(Note: Equinix is a NASDAQ listed MNC headquartered in California that specializes in internet connection and data centres)

(3) The recent acquisition of 18 Tai Seng- Star property as in literally 1 Michelin star

I used to have lunch at 18 Tai Seng. There is a soya sauce chicken rice restaurant at 18 Tai Seng that was opened by Hawker Chan who won the 1 Michelin star award at his original Chinatown Food Complex stall. The name of the outlet is “Liao Fan Hong Kong Soya Sauce Chicken Rice and Noodle”. Tim Ho Wan and also Jalan Kayu Roti Prata also took up retail outlet space at 18 Tai Seng. 

Being a modern industrial development, 18 Tai Seng is a nine-storey special mixed use development that comprises of retail space, industrial and office all integrated into one. The building is connected directly to Tai Seng MRT via underground pedestrian link and easily accessible via public transportation and major expressways such as KPE, PIE and CTE. This property has a tenant base of 44 tenants including multinational firms in a high value-added services such as medical technology, information and communications technology and automotive technology. As at 13 December 2018, the committed occupancy rate was reported to be 94.3%.

The proposed acquisition of 18 Tai Seng for S$268 Mil announced in Dec 2018 is in line with MIT’s business strategy of a greater focus on hi-tech buildings.

(4) Mapletree Property Management Team

If you are a tenant or renovation contractor, you will not like the Mapletree Property Management Department during the handover back to landlord upon lease expiry. From my past dealings, AIMS AMP Capital and Cache are more willing to compromise in the sharing of disputed reinstatement cost as compared to Mapletree folks. Mapletree, on the other hand, are very notorious in the market for very stringent and demandng handing back conditions (they expect almost brand new conditions during handling back). But if you are an investor of MIT, you will absolutely love their Property Management team for enforcing such high standard and uncompromising stance. The Property Management team also enforces the same demanding regime in the maintenance of the common area defects and are aggressive in pushing back repair costs for damages to the tenants in a building. 

Final Thoughts

I see good potential in the organic future growth of MIT especially with the recent acquisition of 18 Tai Seng as well as the venture into data centers with a focus on high technology sector tenants. Most importantly, there is good diversification in terms of its current tenants which will enable MIT to weather any major storm. Last but not least, this is a Mapletree REIT which have excellent pipelines of good properties from its sponsor for future injection into MIT as part of its asset recycling strategy. 

Hyflux Tuaspring Saga- White Knight Becomes Fleeting White Clouds

Since PUB served notice on Hyflux with regard to the defaults in the Water Purchase Agreement ("WPA"), it leads to more questions rather than answers.  If Hyflux does not cure all defaults by April 5, 2019, PUB can elect to terminate the WPA and take over the operations of the desalination plant. The white knight Salim Medco group, in turn, responded with a threat to walk out of the rescue deal if Hyflux management does not cure the operational and financial defaults of Tuaspring by April 1st, 2019. As we all know, Hyflux is already facing a "one leg in the grave" situation. It is thus almost a mission impossible to muster adequate resources in its current state to cure the defaults unless Olivia Lum is able to get PUB to waive the default notice or alternatively, get Salim to pump in cash immediately. The white knight has quickly turned into fleeting white clouds.

There are a few mind-boggling questions here as listed below:

1. Did PUB get its timing wrong to come out on March 5th, 2019 to serve the default notice?

Personally, I think that the serving of the 1-month notice on March 5th, 2019 seems to be throwing the gauntlet on the creditors as an ultimatum. It is too much of a coincidence that the end of the one month notice falls exactly on April 5th, 2019 which is the upcoming creditors restructuring vote. 

While the notice served was to protect Singapore water supply and vital, PUB seems to have been caught off guard that the White Knight decided to pull out of the rescue deal. It quickly issued a statement on March 21st, 2019 that Salim Medco should not use PUB as an excuse to pull out of the Hyflux deal. I believe that the souring of the deal has very much negative political impact given that the general election may be coming up by the end of 2019 or 2020. There are a lot of angry Singaporeans who are going to be losing all their investments in Hyflux. It appears that the government is not keen to bail out Hylfux and is actually hoping that the Salim Medco rescue package will get through.

There is no doubt that whatever was its original intention, PUB had single-handedly smashed the only rescue deal on the table. Keeping my fingers crossed that either PUB or Salim Medco will reconsider their current stand and craft out something mutually acceptable for the restructuring to proceed.  

2. Why did Hyflux not build in a safety mechanism in its contract with PUB during the tender for the building of plant and WPA?

I am not sure why the Hyflux team did not request for a minimum rate to cover their basic cost of building the plant and basic maintenance into the contract. My personal thoughts are this would have reduced the huge losses with running the plant. In my current industry, we will build in a minimum volume or rates in our tender for business contracts. Please see point 3 below on the aggressive water tariff rate submitted by Hyflux.

Alternatively, I think that Hyflux could have proposed a simple cost-plus model to the government agencies given that this is their first major venture into a long term concessionary service agreement. An open book for incurred cost and an agreed markup is definitely a safer option while building up invaluable experience and also financial data for future contracts. This is a similar model used in many commercial contracts.

3. If another operator- other than Hyflux- were to run Tuaspring, will it be profitable?
Hyflux may have been overzealous in its business strategy to derive more stable recurring income by entering into a long term concessionary agreement with an overly optimistic water tariff rates. It seems that in 2010, Hyflux bid for the water contract at a first-year price that was the lowest compared to any desalination plants in Singapore that had been or was being built.

Other operators may have bid using a much higher water tariff rate. PUB had made a statement that it cannot allow Hyflux to revise upwards the tariffs stipulated in the signed agreement given that this would not be fair for the other operators which have also tendered for the contract for the desalination plant during the request for quotation stage in 2010.

4. Do the Hyflux accountant preparing the financial statements and the auditor of Hyflux have access to the WPA? Or is it so confidential such that a lot of vital accounting entries for liabilities and asset valuation were not captured in its financial statement disclosure?

PUB made a statement that there were numerous breaches in the WPA with regard to the volume of daily treated water KPI of 70 million gallons since early 2017. It has also waived off compensation claim of 3 digit million amount. This is a staggering amount. Does this not constitute a legal provision way back in 2017 for breach of agreement?

In addition, I am shocked that PUB had publicly stated that the valuation of the desalination plant is actually negative based on the WPA. Surely, the WPA is a very critical piece of contract for Hyflux that spells out its contractual liabilities as well as Tuaspring valuation. The latest revelation by PUB put another huge dent in the valuation of Tuaspring which would have made the S$916Mil recently announced impairment by Hyflux grossly inadequate.

Please see my last posting on the valuation and impairment of S$916Mil for Tuaspring here.

5. Will the Hyflux saga end with the vote on April 5th, 2019 or will there be lawsuits- David vs Goliath?
From the recent spate of revelations and dividends payout despite poor operating cash flow, it does seem that there are certain contentious areas with regard to the financial statement preparation as well as the contentious issue of fiduciary duties to shareholders that will be up for dispute. I do hope that things turn out well for all retail investors and holders of perpetual securities and all issues settled amicably.

Skills Future Credit Being Used to Eat Buffets At Hotels

The original goal of Skills Future Credit scheme aims to encourage individual ownership of skills development and lifelong learning. All Singaporeans aged 25 and above will receive S$500 credit each. Little did the government realize that some operators turned this life long learning scheme into the financing of "buffet lunch treats" for senior citizens.

It is troubling to see that there seems to be an emerging trend of unscrupulous training centers targeting senior citizens to suck out the Skills Future Credit of S$500 granted. The modus operandi is to offer free hotel buffet lunch. The emphasis by the training centers and their sales team is not on how useful their courses are but instead, "free hotel buffet lunch" is being marketed aggressively to senior citizens. Senior citizens are encouraged to bring along their friends and refer them to the training centers.  

My mum was approached by one of the sales personnel of a local training center to go for one of their courses. The salesman marketed the course as a free buffet session at a local hotel. The saleman even ask for the Singpass PIN number of my Mum to help her log into the Skills Future Credit portal to file for the training claim as she does not know how to use the computer. While I am impressed by the entrepreneurship displayed by such training centers, I think that this is unethical and as the Malaysian PM Mahathir likes to say: "This is morally wrong".  

First REIT Q1 2019 Review: Sponsor Lippo Karawaci To Raise USD1 Billion in Funding

Since the last quarter of 2018, First REIT share price has languished and plunged more than 25% due to the Indonesian corruption probe involving its sponsor and main tenant Lippo Karawaci. At the lowest point, it dropped to S$0.92 per unit which is substantially lower from the S$1.30 per unit days. The concern over potential rental default by Lippo Karawaci over its worsening creditworthiness cast a dark cloud over First REIT. The market situation is further exacerbated by bad news that the upcoming renewal of master leases of the first few hospitals due in 2021 will be on new unfavorable terms and conditions with regard to the use of Rupiah instead of Singapore dollars which will subject First REIT to adverse forex exposure. 

With the announcement by Lippo Karawaci that it is intending to raise USD 1 Billion in funding to shore up liquidity and cut down bank loans, the risk of a potential default on rental payment to First REIT has been reduced significantly in the short term. Lippo Karawaci planned to raise US$730Mil via rights issue (which will be fully underwritten by the Riady billionaire family) and another US$280Mil via the sales of Puri Mall to Lippo Malls Indonesia Retail Trust. The notable highlight here is that U.S investor George Raymond Zage and Hong Kong conglomerate Chow Tai Fook are committing and subscribing to US$70Mil of the rights issue. This clearly demonstrated the confidence by the other major shareholders that Lippo Group will eventually pull through this tumultuous period for their business.

The rights issue is slated for completion by the 1st half of 2019 and subject to shareholders’ approval at an upcoming annual general meeting next month on April 18, 2019. Out of the cash pool raised, US$290Mil will be set aside to pay rental for REITs as well as to fund debt interest payments. However, one point to take note of is that the capital injection is expected to finance business operations through till December 2020. If Lippo Karawaci property development business continues to go downhill for its US$21 billion Meikarta project in Indonesia, the risk of default will return very quickly. Investors will no doubt panic again and vote with their feet. 

Siloam Hospitals Bali- Indonesia

Pacific Healthcare Nursing Home @Bukit Merah-Singapore

I am currently still vested in First REIT. However, since the market rally at the beginning of the year, I have been selling off part of my holdings at around S$1.10 to reduce my portfolio exposure to First REIT in the event that the sponsor goes bankrupt and default. With the release of the news of additional funding by Lippo Karawaci and also recent quarter good financial performance by First REIT, I believed that for the upcoming one and a half year, the prices should stabilize at the current level and I have begun buying back units at S$1.00. 

Of course, the other issue with holding on to First REIT is that with OUE-Lippo Healthcare coming into the picture as a co-sponsor through the recent acquisition of the REIT manager (Bowsprit) as well as direct stakes taken up, the current management is looking to rebalance its portfolio such that up to 50% of its assets will be located beyond Indonesia within the next 3-5years. Based on assets under management of S$1.35 billion (98% in Indonesia and remaining 2% in Singapore and Korea) as at 31 December 2018, this means probably another S$265Mil to S$442Mil on average of rights issue per year over the next 3-5 years to complete the transformation. Investors holding on to FIRST REIT need to prepare themselves for rights issue out of their own pocket if they believe in this new business vision. 

Sarang Hospital-Korea 

Last but not least, with the plunge in unit price and current high yield of 8.5%, it will be extremely challenging trying to get a similar yield accretive healthcare asset from OUE-Lippo Healthcare. Despite all these challenges on the ground, I look forward to the exciting growth story of First REIT and how it will revamp itself for the future under a proven Bowsprit management team with good M&A execution track record lead by their CEO, Victor Tan.

Malaysia Keep Saying That Water Agreement Pricing Is “Morally Wrong”

I read with amusement that Mahathir and his other Malaysian officials are bashing up Singapore again. Whenever there are internal economic woes, Mahathir and his team will start chanting "bash Singapore" to distract the local population from the domestic problems back at their home in Malaysia. 

Recently last week, Mohd Solihan Badri, Media director of Johor chapter of Mahathir''s Parti Pribumi Bersatu Malaysia appealed to Singaporeans to urge our government to review the prices of the water deal with Malaysia, reiterating that the agreement is "morally wrong". 

The water agreements are actually confirmed and guaranteed by both Singapore and Malaysian Governments in the 1965 Separation Agreement, also known as the Independence of Singapore Agreement. Any breach of the Water Agreements would also call into question the Separation Agreement and can undermine the existence of Singapore. We need to respect the sanctity of the Water Agreements. 

Singaporean investors who hold properties and direct stocks exposure in Malaysia may need to take into account the higher political risk in their investment portfolio based on the current hostility exhibited by the Malaysian Prime Minister. Mahathir is notorious for introducing changes in policies such as capital control targeted against Singaporeans. The Central Limit Order Book ("CLOB") saga in 1998 is a good example where the accounts of Singaporean investors were frozen and their claims declared invalid by the Malaysian government.

The Florence Residences Sold Only 54 Units On Launch- Sign of Slowdown in Singapore Property Market?

Since the official launch of The Florence Residences over the weekend on March 2nd, 2019, it sold only 54 units.  This represented 3.8% of total units of 1,410 being sold at this first-weekend launch. The developer's version of the sales results is that close to 30% of units were sold reason being that they only released 200 units. The average psf pricing is S$1,450 psf.

Seems that sales results are not that ideal due to excess supply of other units launched from competitors. Riverfront Residences, Affinity at Serangoon and Garden Residences nearby also have many unsold units. Prospective buyers thus have plenty of choices in the current market. Another possible factor is what I think is the very high launched price of S$1,450psf. At S$1,450psf, this is even higher than Kovan Residences and Kovan Regency which have already TOP and are in better locations such as closer proximity to Kovan MRT station and other basic amenities. 

Under the ABSD rules, URA gave developers 5 years to complete a residential project and to sell all units else they must pay the ABSD set at 15% of the site's purchase price. For such mega projects, the effect of the ABSD from non-compliance will be severe. Hence we may see the offering of further discounts or renovation vouchers by the developer in order to attract buyers and move units.

P.S: Please see my previous review of Florence Residences here.

Hyflux Impairment of S$916Mil for Tuaspring- Does it make sense?

I actually do not want to post any more topic on Hyflux as this subject has become very sensitive lately and stir up much negative feelings with the upcoming voting on creditor restructuring. But being an ex-auditor, I seriously think that our Singapore Authorities should re-look into the asset valuation framework and standard for all Singapore Companies listed on SGX so as to better protect retail investors. 

In June 2018, Tuaspring carrying book value was SGD 1.47 Billion. This plummeted by SGD 916Mil within half a year for the results released as at 30 September 2018. The key question is how can the valuation of Tuaspring just nosedive overnight? The weakness over the electrical tariff is a recurring issue since day one of Tuaspring operation. So, why was there no major impairment then but only took a big bath at this juncture?

According to the accounting standard, an impairment arises if the carrying value of an asset is less than its recoverable value. The recoverable value, in turn, needs to be assessed based on the higher of (i) fair value less cost to sell or (ii) Value in Use.

(i) Fair Value Less Cost to Sell

The fair value concept is basically the market price of similar assets less off transaction cost to sell. In Tuaspring case, this is not likely to be used as there are not many comparable deals. This is unlike say trading in quoted equities.

(ii) Value in Use

This is the present value of the future cash flows expected to be derived from Tuaspring. Based on future cash flows projection and poor market pricing of electricity, this value in use will be a lot lower than the carrying amount of Tuaspring. This lowered "value in use" should give rise to an extremely low "recoverable value" against the actual carrying value. While the value in use projection is subject to numerous assumptions and judgments, there should be stress tests with different scenarios drawn up for proper assessment. I cannot comprehend why no major impairment had been recognized in the previous financial years of Hyflux and that for FY2018 results announced in 2019, an impairment of SGD916 Mil for Tuaspring suddenly materialized. 

Hyflux had replied that it intended to appoint a further valuation to be undertaken by a different valuer for the purpose of finalizing its 2018 full-year financial results. As you can see, the business of valuation is an extremely tricky and messy affair. But saying that, my personal thought is that it does not make sense for an infrastructure asset to plunge in its value by 60% overnight.  

Final Thoughts

Hyflux has just announced a better package to appease unsecured retail investors after the submission of an alternative proposal by SIAS. Hopefully, things turn out well for the upcoming meeting and Hyflux can survive the current crisis.

Pls see other posts on Hyflux
(i) White Knights Charging Forward To Save Hyflux And Tuaspring
(ii) Government Should Bail Out Hyflux And Don't Put All Your Eggs Into One Basket

Fu Yu Corp Super Hero Cash Generating Abiliites Strikes Again- Returns 100% Profits As Dividends to Loyal Shareholders

Fu Yu Corp has done it again and delivered another sterling results on its FY2018 financial performance with a 165% jump in net profit to S$11.88Mil. Just like Wolverine in X-Men with super healing, Fu Yu Corp has showcased its superpower in cash generation from its business operations. For FY2018, it has increased its dividend payout by 0.1 cents from 1.5 cents in FY2017 to 1.6cents in FY2018. This represents close to 100% of its net profit being given back to reward loyal shareholders. Based on the latest closing price of S$0.205, this is a 7.80% dividend yield for FY2018.

Huge Jump in Net Profit for FY2018 relative to FY2017

Zero Bank Borrowings/Debts

There is no debt on Fu Yu Corp statement of financial position. I need to emphasize that besides not having a single cent in debt, Fu Yu Corp is sitting on a huge pile of cash balances totaling S$80.3Mil. Besides diversifying its revenue sources, management has also successfully restructured production cost efficiency. The excess capacity in its plants, as well as its massive cash hoard,  also makes it an attractive M&A target which should eventually further unlock its intrinsic value by another 20% to 30%. For FY2019 which is coming off the successful fine-tuning in business strategies implemented over the last 2 years, Fu Yu Corp should be able to deliver another year of good performance barring any unforeseen downturn in macro-economics environment.

Parting Note on Future Outlook
In particular, I like the strategies that the management has laid out for the future direction of Fu Yu Corp business development. The business development team will continue working to expand market share with existing customers and to diversify their customer base across targeted market segments and to secure projects with longer product life cycles and higher growth potential. This should enhance business resiliency and stability amidst the challenging environment.

P.S: Please refer to my previous posting- "Fu Yu Corporation- SUPER Hero cash generating abilities".

Malaysia To Launch Prototype of Flying Car

Picture denotes the Thunder Hawk  flying car of a cartoon series known as Mask

Malaysia has announced plans to build a flying car and launch a working prototype by end of the year using its own local technology. This is good news indeed. Earlier this month while I was in Malaysia for Lunar New Year, the trip from Yong Peng back to Singapore of typically 1.5hours ended up with 8.5 hours spent on the highway and Customs due to the severe traffic jam. With a flying car, this will beat the damn traffic jam. Militaries around the world should also be interested in this great product. I am sure the demand will be very high. 

Once the flying car is successfully launched, Malaysia will have a technological advantage in manufacturing with this know how. Hopefully, Malaysia will become richer with this new product. This will reduce the excuses that the current Malaysian Prime Minister, Mahathir has on hand such as to get "Rich" Singapore pay higher water charges to "Poor" Malaysia. Malaysia actually has lots of raw materials and oil and definitely so much richer than Singapore in terms of natural resources. Looking forward to the unveiling of the flying car prototype at year end.

Florence Residences at Hougang Ave 2- Mega Launch at S$1,450psf average?

Went down to The Florence Residences showflat last week to see the latest upcoming development developed by Logan Property in Hougang. This was originally a HUDC site that was being en bloc. I can still remember visiting one of the units during my search for a resales HDB during 2007/2008. The cost price of a unit then was around S$800K. If only I have bought it then, would have become an instant en bloc millionaire last year....whaha.

This is a huge site that is approximately 386,000sqft in size. The developer will be building 1,410 units. The Florence Residences and is near north east line Hougang MRT station and Kovan MRT station. The side gate at Florence Road will lead to Kovan area with a 10min -12mins walk. Many good eateries such as the famous Punggol Nasi Lemak, Yong's Teochew Kueh and Lola's Cafe are found along Upper Serangoon Road and Simon Road. Since this is within 700m to Kovan MRT station, this is actually a walkable distance to MRT and bodes well for rental or future capital appreciation.

There are over 12 amazing club concepts and 128 facilities in this development. The centerpiece is the gigantic 80m main pool at the center of the estate. The only issue I have is the presence of only 1 swimming pool which is being shared by 1,410 units. For similar en bloc HUDC such as Riverfront Residences and Jadescape, there are 2 swimming pools to spread out residents.  For the internal layout of units, I love the efficient squarish layout of units on display.

However, I nearly fainted when the property agent told me that the developer target to launch this at an average of S$1,450psf. So, a 2 bedder (635sqft) starts from around S$863K, 3 bedder (893sqft) at around SS1.222Mil, 4 bedders (1,281sqft) at approximately $1.675Mil and 5 Bedder (1,668sqft) at S$2.41Mil. I am still shocked at the launch price of units in suburbia areas these days. With S$1,450 psf, one may consider getting a unit at Kovan Residence (right on top of Kovan MRT station) if one does not mind a resales unit. If compare to the upcoming CDL and Capitaland Sengkang Centre Residences at Buangkok which is projected to launch at S$1,650psf to S$1,700psf, Florence Residences thus appeared to be cheaper. Will you buy a unit at The Florence Residences?