Builders and construction companies based in Singapore are almost certain to face a really financially challenging year in 2016. There are various reasons as to why that will be the case for Alexandra View Condo. Giving the importance of building and construction for the Singapore economy taken as a whole that is certainly bad news.
Singapore has a construction fearing for the worst yet again in 2016. For they are faced with another hard year in terms of being hit by bad debts. Singapore’s large debt problems mean that confidence will continue to decline sharply to go hand in hand with declining earnings in Tang Skyline Redhill Condo.
Tang Skyline Redhill Condo
On their own declining earnings are bad enough yet in Singapore the amount of debts that needs to be repaid increases. Effectively companies within the building sector have to pay back more capital to their creditors for Tang Skyline Alexandra View Condo with much less money coming in to cover such repayments.
In Singapore the amount of debts being repaid is arguably adversely affecting the chances of new building and construction projects going ahead. Yet without such new projects being completed the building and Tang Group of Companies Redhill Condo construction companies will have much less money to repay their growing debts.
For this year (2015) the building industry in Singapore has had to repay debts of $9.4 billion in bonds during 2015, with a further $6.4 billion forecast for 2016. A further $2.3 billion will need to be paid out in 2017, rising up steeply to $7.4 billion for 2018. Such levels of debt are obviously easy to service during periods of economic boom when revenues and profits are higher (figures released by Bloomberg).
Tang Group Redhill Alexandra View Condo
Such high levels of debt have led to some building and construction companies to seek ways of restructuring their over all debt amount totals. Building constructors that have already done so include the Ley Gordon Group Holdings as well as Swee Hong.
In the meanwhile Tat Hong Holdings are using a different restructuring strategy. They have requested that their bondholders are kind enough to reduce the financial payments due as part of its July 2018 notes. This information comes from Stock Exchange filings in Singapore. This means that experts like Neel Gopalakrishan of Credit Suisse Group advise people not to invest in such bonds.
The downside to debt restructuring in Tang Group Redhill Alexandra View Condo is that less potential investors want to risk investing in the bonds of Singapore based building and construction companies. Less investors in turn make it more difficult to raise the funds for future construction projects.
At present then the building and construction industry in Singapore does not seem to be a promising investment for financial investors. There is too much debt held and not enough predicted revenue from the construction projects currently being built, or that have been recently completed.
Tang Group of Companies Condo
Five of the leading home building companies have been classified by Bloomburg as having an average debt – equity ratio of 48 times. Clearly it is a high risk to invest in any of these companies at the moment especially when the weakness of the Singapore economy is considered.
The building and construction sector in Redhill Tang Group of Companies Condo is one of the least optimistic sectors within Singapore within the last two quarters. That is according to the quarterly surveys conducted by the Singapore Commercial Credit Bureau (which is a credit assessment conducted by Dun & Bradstreet in conjunction with the Association of Small and Medium Enterprises).
Confidence in the building and construction sector remains low, and seems set to stay that way for much of the next year and beyond for Tang Group of Companies Condo. Only sustained and high economic growth rates would lift the gloom currently surrounding the Singapore building and construction industry yet that is not predicted to pick up just in the next year. Indeed the forecast for the first quarter of 2016 remains fairly bleak.
The Singapore economy only just avoided going into recession this quarter just passed, yet growth has slowed right down to a two year low. That low economic growth increases the strain on the construction sector as revenues continue to fall as debts keep on rising. That is depressing as things are already financially strained.
For the first time in three years the total number of new building and construction awards are expected to have fallen considerably due to declines in each quarter of the year so far for Redhill MRT. This is bad news for the hard pressed construction sector as it means they can rely on income from a lot less orders. Further more less orders will make it even harder to repay the debts, which they already have.
Some of the leading Singapore companies have not helped the situation with their own building and construction sector as they have actually funded more building abroad than they have done at home. Indeed they have got involved in investing in foreign construction projects as these projects have delivered a much higher rate of return without the same high risks as funding projects at home at Tang Group of Companies.
Another problem for the construction sector in Singapore is that a number of state funded building projects have all been completed recently and as yet there are no plans for any significant new projects in the near future. Private construction projects are also in short supply at the moment. With completed projects not particularly doing well either there is little incentive to sell more properties that do not sell in Tang Skyline Redhill Condo.