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02-12-2014, 08:05 AM
There is nothing new here... key is to buy well in well regulated regime and at reasonable prices... when you are a developer, your core business is property owning and development...
http://www.themalaymailonline.com/money/...e-overseas
MONEY
Singapore developers struggling to sell at home go on buying spree overseas
PUBLISHED: DECEMBER 1, 2014 12:35 PM
Prospective buyers look at a model of an upcoming suburban private condominium development during its launch in Singapore. — Reuters pic
Prospective buyers look at a model of an upcoming suburban private condominium development during its launch in Singapore. — Reuters pic
SINGAPORE, Dec 1 — Singapore developers struggling to sell apartments in their home market are buying property overseas, turning the island-state into the largest foreign investor from the region this year.
Companies including City Developments Ltd. and Keppel Land Ltd. pumped US$2.32 billion (RM7.97 billion) into overseas markets in the nine months through September, a threefold increase from the same period last year and the most in at least eight years, according to data from Real Capital Analytics Inc., a research firm that specializes in investments in commercial property.
The Singapore developers are looking abroad as government measures to rein in property values have caused residential prices to fall for four straight quarters, the longest period of declines since 2009.
“Many Asian countries such as Singapore are facing property cooling measures at home, so they are venturing to Western markets where they can find returns and are seeing a strong recovery,” said Terence Tang, managing director of capital markets and investment services for Asia at Colliers International, a real estate broker.
City Developments, Singapore’s second-largest developer by market value, said in September that it invested in a plot of land in Tokyo valued at S$356 million (RM958.92 million). Keppel Land, Singapore’s third-biggest developer, in July said it made its maiden investment in the US with a prime residential development in New York City. The project, which it said at the time was valued at about US$70 million, is on Manhattan’s Upper East Side and will be developed by Macklowe Properties Inc.
‘Virtually dead’
At the same time, the developers have become increasingly vocal about the difficulties they face in Singapore, where their margins have been squeezed by falling property prices. Government measures to stem growth in the market and prevent a speculative bubble have brought residential prices down about 4 per cent from the peak in September 2013.
“In Singapore, the residential market is virtually dead,” said Desmond Woon, executive director at luxury-home developer Ho Bee Land Ltd. “With the government measures in place, it has become very hard to do development of residential properties.”
The government’s curbs have included a cap on debt at 60 per cent of a borrower’s income and higher stamp duties on home purchases. Additional taxes for foreigners buying residential property were raised to 15 per cent in 2013 from 10 per cent, on top of the basic buyer’s stamp duty rate of about 3 per cent. All home sellers need to pay 16 per cent in levies if they sell within the first year.
City Developments warned last month that Singapore’s housing market may face “fire sales” and mortgage defaults as sales and prices fall.
GIC spree
The overseas investments by developers have helped catapult Singapore into the top place among Asian countries investing in overseas real estate so far this year, according to figures from New York-based RCA.
The country’s sovereign wealth fund, GIC Pte, has been a major buyer of overseas real estate, though its 20-year investment horizon gives it a different profile from the listed Singapore developers. In total, Singapore entities invested US$9.8 billion in overseas commercial property in the nine months to September, overtaking China with US$8.4 billion of overseas investments and Hong Kong with US$7.3 billion, RCA said.
Ho Bee, which has invested in office towers in London and is developing homes in Melbourne and Gold Coast in Australia, is scouting for more buying opportunities in Sydney and London, Woon said.
New York, Australia
The flipside of the developers’ growing interest in overseas real estate has been a drop in bidding at Singapore land auctions as the market cooled. Results of a land auction announced in August showed only three bids were submitted, the fewest in 18 months, and well below 2009 when there were about 16 bids at the auctions, according to Nicholas Mak, executive director at SLP International Property Consultants.
Developers are willing to take on the additional risks associated with overseas investments, Tang at Colliers said.
“Mainland Chinese and Singapore developers are going to New York, Australia and the UK,” Tang said. “They are ready to take a development risk, which is the highest point of the risk curve, as they need higher returns and because they are seeing these markets showing signs of a recovery.”
They are also finding higher yields. Profit margins for developing homes in Singapore are between 5 per cent and 10 per cent while margins in Australia are between 10 per cent and 20 per cent, Ho Bee’s Woon said. Office properties in London can yield between 4 per cent and 6 per cent while Singapore office yields are about 4 per cent, he said.
Shares of City Developments fell 1 per cent to S$9.96 as of 11:39 a.m. in Singapore, while Keppel Land declined 1.5 per cent to S$3.32. Ho Bee lost 0.8 per cent to S$1.97.
Overseas opportunities
“The Singapore residential real estate market will need to battle headwinds as sentiments remain subdued with little signs of property curbs being tweaked or removed in the near-term,” City Developments said in an e-mailed response, citing their earnings statement. The company is “actively pursuing opportunities in the US, UK, Australia, China and Japan,” it said.
The government said in October that home prices need to fall further.
Other developers going overseas include Pontiac Land Group, owner of the Singapore Ritz-Carlton, which invested US$200 million in reviving a 72-story residential tower project adjacent to the Museum of Modern Art in midtown Manhattan last year. OUE Ltd., owner of Singapore’s Mandarin Gallery shopping mall, agreed to buy US Bank Tower in Los Angeles, California’s tallest building, for US$367.5 million in March 2013.
Yield search
Singapore developers are acquiring mostly offices in London and hotels and commercial properties in Sydney, Colliers said.
“Developers are searching for higher yields and returns,” said Sigrid Zialcita, managing director for Asia- Pacific research at real estate broker Cushman & Wakefield Inc. “Singapore with its cooling measures is quite restrictive in terms of investments. We don’t see a dramatic reversal of policies over the next year so the trend of developers going overseas will continue.”
The city-state has fallen out of a ranking of the top 20 cities for property investment, according to a report by Cushman & Wakefield. Singapore, along with Toronto, Moscow and Seoul, was knocked out by Beijing, Shanghai, Miami and Stockholm, the report showed.
“The risk appetite is getting larger and larger with the profile of investors and the structure of deals changing,” Tang said. “The real estate market has slowed down a fair bit in Asia so developers need to find other alternatives to generate profit so they are going to markets outside Asia where they can see growth potential and a strong recovery.” — Bloomberg
http://www.themalaymailonline.com/money/...e-overseas
MONEY
Singapore developers struggling to sell at home go on buying spree overseas
PUBLISHED: DECEMBER 1, 2014 12:35 PM
Prospective buyers look at a model of an upcoming suburban private condominium development during its launch in Singapore. — Reuters pic
Prospective buyers look at a model of an upcoming suburban private condominium development during its launch in Singapore. — Reuters pic
SINGAPORE, Dec 1 — Singapore developers struggling to sell apartments in their home market are buying property overseas, turning the island-state into the largest foreign investor from the region this year.
Companies including City Developments Ltd. and Keppel Land Ltd. pumped US$2.32 billion (RM7.97 billion) into overseas markets in the nine months through September, a threefold increase from the same period last year and the most in at least eight years, according to data from Real Capital Analytics Inc., a research firm that specializes in investments in commercial property.
The Singapore developers are looking abroad as government measures to rein in property values have caused residential prices to fall for four straight quarters, the longest period of declines since 2009.
“Many Asian countries such as Singapore are facing property cooling measures at home, so they are venturing to Western markets where they can find returns and are seeing a strong recovery,” said Terence Tang, managing director of capital markets and investment services for Asia at Colliers International, a real estate broker.
City Developments, Singapore’s second-largest developer by market value, said in September that it invested in a plot of land in Tokyo valued at S$356 million (RM958.92 million). Keppel Land, Singapore’s third-biggest developer, in July said it made its maiden investment in the US with a prime residential development in New York City. The project, which it said at the time was valued at about US$70 million, is on Manhattan’s Upper East Side and will be developed by Macklowe Properties Inc.
‘Virtually dead’
At the same time, the developers have become increasingly vocal about the difficulties they face in Singapore, where their margins have been squeezed by falling property prices. Government measures to stem growth in the market and prevent a speculative bubble have brought residential prices down about 4 per cent from the peak in September 2013.
“In Singapore, the residential market is virtually dead,” said Desmond Woon, executive director at luxury-home developer Ho Bee Land Ltd. “With the government measures in place, it has become very hard to do development of residential properties.”
The government’s curbs have included a cap on debt at 60 per cent of a borrower’s income and higher stamp duties on home purchases. Additional taxes for foreigners buying residential property were raised to 15 per cent in 2013 from 10 per cent, on top of the basic buyer’s stamp duty rate of about 3 per cent. All home sellers need to pay 16 per cent in levies if they sell within the first year.
City Developments warned last month that Singapore’s housing market may face “fire sales” and mortgage defaults as sales and prices fall.
GIC spree
The overseas investments by developers have helped catapult Singapore into the top place among Asian countries investing in overseas real estate so far this year, according to figures from New York-based RCA.
The country’s sovereign wealth fund, GIC Pte, has been a major buyer of overseas real estate, though its 20-year investment horizon gives it a different profile from the listed Singapore developers. In total, Singapore entities invested US$9.8 billion in overseas commercial property in the nine months to September, overtaking China with US$8.4 billion of overseas investments and Hong Kong with US$7.3 billion, RCA said.
Ho Bee, which has invested in office towers in London and is developing homes in Melbourne and Gold Coast in Australia, is scouting for more buying opportunities in Sydney and London, Woon said.
New York, Australia
The flipside of the developers’ growing interest in overseas real estate has been a drop in bidding at Singapore land auctions as the market cooled. Results of a land auction announced in August showed only three bids were submitted, the fewest in 18 months, and well below 2009 when there were about 16 bids at the auctions, according to Nicholas Mak, executive director at SLP International Property Consultants.
Developers are willing to take on the additional risks associated with overseas investments, Tang at Colliers said.
“Mainland Chinese and Singapore developers are going to New York, Australia and the UK,” Tang said. “They are ready to take a development risk, which is the highest point of the risk curve, as they need higher returns and because they are seeing these markets showing signs of a recovery.”
They are also finding higher yields. Profit margins for developing homes in Singapore are between 5 per cent and 10 per cent while margins in Australia are between 10 per cent and 20 per cent, Ho Bee’s Woon said. Office properties in London can yield between 4 per cent and 6 per cent while Singapore office yields are about 4 per cent, he said.
Shares of City Developments fell 1 per cent to S$9.96 as of 11:39 a.m. in Singapore, while Keppel Land declined 1.5 per cent to S$3.32. Ho Bee lost 0.8 per cent to S$1.97.
Overseas opportunities
“The Singapore residential real estate market will need to battle headwinds as sentiments remain subdued with little signs of property curbs being tweaked or removed in the near-term,” City Developments said in an e-mailed response, citing their earnings statement. The company is “actively pursuing opportunities in the US, UK, Australia, China and Japan,” it said.
The government said in October that home prices need to fall further.
Other developers going overseas include Pontiac Land Group, owner of the Singapore Ritz-Carlton, which invested US$200 million in reviving a 72-story residential tower project adjacent to the Museum of Modern Art in midtown Manhattan last year. OUE Ltd., owner of Singapore’s Mandarin Gallery shopping mall, agreed to buy US Bank Tower in Los Angeles, California’s tallest building, for US$367.5 million in March 2013.
Yield search
Singapore developers are acquiring mostly offices in London and hotels and commercial properties in Sydney, Colliers said.
“Developers are searching for higher yields and returns,” said Sigrid Zialcita, managing director for Asia- Pacific research at real estate broker Cushman & Wakefield Inc. “Singapore with its cooling measures is quite restrictive in terms of investments. We don’t see a dramatic reversal of policies over the next year so the trend of developers going overseas will continue.”
The city-state has fallen out of a ranking of the top 20 cities for property investment, according to a report by Cushman & Wakefield. Singapore, along with Toronto, Moscow and Seoul, was knocked out by Beijing, Shanghai, Miami and Stockholm, the report showed.
“The risk appetite is getting larger and larger with the profile of investors and the structure of deals changing,” Tang said. “The real estate market has slowed down a fair bit in Asia so developers need to find other alternatives to generate profit so they are going to markets outside Asia where they can see growth potential and a strong recovery.” — Bloomberg
