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05-08-13, 11:50
http://www.businesstimes.com.sg/archive/tuesday/premium/top-stories/china-cash-homes-spore-property-20130730
Published July 30, 2013
China cash homes in on S'pore property
Big jump in Chinese investments here and it's not limited to the residential sector
By Mindy Tan
[SINGAPORE] An influx of Chinese capital is making itself felt in Singapore real estate, and not just in the residential segment.
Looking at investment transactions above $50 million, CBRE has found that since the global financial crisis (GFC), Chinese capital invested in Singapore has been just short of $5 billion.
Petra Blazkova, CBRE head of research for Singapore and South-east Asia, noted that in the first half of 2013, Chinese money represented 69 per cent of all foreign capital invested in Singapore (for investments above $50 million).
In H1 2012, Chinese money accounted for 27 per cent of all foreign capital invested while in H2 2012, it was 67 per cent.
The residential sector is still the investment segment of choice, but China investors are diversifying.
Comparing purchases in 2005 to 2008 to purchases from 2009 to H1 2013 by number of caveats, industrial and retail strata transactions saw the largest spike at 67 per cent. This was followed by offices and shophouses at 56 per cent and 22 per cent respectively, noted CBRE.
"While the number of purchases by Chinese capital grew exponentially (since the GFC) across all asset classes, the largest amount of transactions were completed in the industrial sector," said Ms Blazkova.
The cooling measures earlier this year, which targeted residential and industrial sectors, have pushed interest to the retail and office strata markets.
"However, transactions in industrial properties remain comparable to previous periods. We see a slight pullback in bigger transactions in the industrial space, likely to be due to the cooling measures imposed," said Sigrid Zialcita, managing director of Cushman & Wakefield's (C&W) research team in the Asia-Pacific.
Interest in low-cost commercial properties - defined as below $2 million - has increased steadily, from six transactions in the first half of 2010 to nine transactions in the first half of 2011, and 26 transactions in the first half of 2012. A total of 27 transactions in low-cost commercial properties took place in the first half of this year.
Interest in high-end industrial properties slowed down, on the other hand, from a peak of three transactions in the first half of 2011 and second half of 2012 respectively, to none in the first half of this year.
One of the key factors drawing money to the strata-title sector is that the total price quantum is relatively affordable for businesses and investors, said CBRE's Ms Blazkova.
"In the strata-titled office market, most units cost between $770,000 and $1.95 million, depending on size, location and facing," she said.
The measures to cool speculative fever in the residential market saw demand spilling over to the commercial and industrial strata segment.
Last month, Wen Way Investments purchased all 22 retail units at The Sail@Marina Bay for $105 million. This works out to about $4,582 per square foot based on the total strata area of 22,916 square feet.
The Singapore-incorporated company, which is controlled by China interests, has purchased about $200 million of real estate in Singapore. This includes its acquisition last year of the top three floors of the 24-storey Tung Centre for nearly $63.6 million and four prime adjoining shop units on the third floor of Far East Plaza for $20.36 million.
Separately, Park Regis Singapore, a 203-room hotel and seven-storey office block with about 42,000 sq ft of net lettable area, was sold to a Chinese buyer for about $250 million.
Residential investments remain the most popular. Qingjian, for instance, bought two plots of land under the Government Land Sales programme - an executive condominium site at Anchorvale Crescent (about $246 million) and another one between Woodlands Avenue 5 and 6 for about $216 million.
On the collective sales front, Fantasia scooped up Ultra Mansion in a collective sale for $149.1 million. This translates to about $1,170 psf of potential gross floor area for the 13-storey freehold development near Novena MRT Station.
Elsewhere, luxury developer KOP Properties sold the remaining 36 units in Hamilton Scotts to Reignwood Holding for $407 million. Touted as the world's tallest luxury residence with en suite elevated "sky garages", Hamilton Scotts features 56 units.
Keppel Land, on the other hand, has sold 30 per cent of a prime residential site in Tanah Merah to China Vanke for about $135.5 million. Under an agreement to jointly develop properties in Singapore and China, the two groups will develop the condominium project on the 3.2 hectare site.
Based on data culled from 2007 to 2013, C&W found that the biggest Chinese investor in Singapore is the China Investment Corporation, which has pumped in an estimated $750 million.
This is followed by Hao Yuan Investment ($645.8 million), which is the developer behind the high-profile EC, Forestville, in Woodlands, and MCC Land ($473.3 million).
Published July 30, 2013
China cash homes in on S'pore property
Big jump in Chinese investments here and it's not limited to the residential sector
By Mindy Tan
[SINGAPORE] An influx of Chinese capital is making itself felt in Singapore real estate, and not just in the residential segment.
Looking at investment transactions above $50 million, CBRE has found that since the global financial crisis (GFC), Chinese capital invested in Singapore has been just short of $5 billion.
Petra Blazkova, CBRE head of research for Singapore and South-east Asia, noted that in the first half of 2013, Chinese money represented 69 per cent of all foreign capital invested in Singapore (for investments above $50 million).
In H1 2012, Chinese money accounted for 27 per cent of all foreign capital invested while in H2 2012, it was 67 per cent.
The residential sector is still the investment segment of choice, but China investors are diversifying.
Comparing purchases in 2005 to 2008 to purchases from 2009 to H1 2013 by number of caveats, industrial and retail strata transactions saw the largest spike at 67 per cent. This was followed by offices and shophouses at 56 per cent and 22 per cent respectively, noted CBRE.
"While the number of purchases by Chinese capital grew exponentially (since the GFC) across all asset classes, the largest amount of transactions were completed in the industrial sector," said Ms Blazkova.
The cooling measures earlier this year, which targeted residential and industrial sectors, have pushed interest to the retail and office strata markets.
"However, transactions in industrial properties remain comparable to previous periods. We see a slight pullback in bigger transactions in the industrial space, likely to be due to the cooling measures imposed," said Sigrid Zialcita, managing director of Cushman & Wakefield's (C&W) research team in the Asia-Pacific.
Interest in low-cost commercial properties - defined as below $2 million - has increased steadily, from six transactions in the first half of 2010 to nine transactions in the first half of 2011, and 26 transactions in the first half of 2012. A total of 27 transactions in low-cost commercial properties took place in the first half of this year.
Interest in high-end industrial properties slowed down, on the other hand, from a peak of three transactions in the first half of 2011 and second half of 2012 respectively, to none in the first half of this year.
One of the key factors drawing money to the strata-title sector is that the total price quantum is relatively affordable for businesses and investors, said CBRE's Ms Blazkova.
"In the strata-titled office market, most units cost between $770,000 and $1.95 million, depending on size, location and facing," she said.
The measures to cool speculative fever in the residential market saw demand spilling over to the commercial and industrial strata segment.
Last month, Wen Way Investments purchased all 22 retail units at The Sail@Marina Bay for $105 million. This works out to about $4,582 per square foot based on the total strata area of 22,916 square feet.
The Singapore-incorporated company, which is controlled by China interests, has purchased about $200 million of real estate in Singapore. This includes its acquisition last year of the top three floors of the 24-storey Tung Centre for nearly $63.6 million and four prime adjoining shop units on the third floor of Far East Plaza for $20.36 million.
Separately, Park Regis Singapore, a 203-room hotel and seven-storey office block with about 42,000 sq ft of net lettable area, was sold to a Chinese buyer for about $250 million.
Residential investments remain the most popular. Qingjian, for instance, bought two plots of land under the Government Land Sales programme - an executive condominium site at Anchorvale Crescent (about $246 million) and another one between Woodlands Avenue 5 and 6 for about $216 million.
On the collective sales front, Fantasia scooped up Ultra Mansion in a collective sale for $149.1 million. This translates to about $1,170 psf of potential gross floor area for the 13-storey freehold development near Novena MRT Station.
Elsewhere, luxury developer KOP Properties sold the remaining 36 units in Hamilton Scotts to Reignwood Holding for $407 million. Touted as the world's tallest luxury residence with en suite elevated "sky garages", Hamilton Scotts features 56 units.
Keppel Land, on the other hand, has sold 30 per cent of a prime residential site in Tanah Merah to China Vanke for about $135.5 million. Under an agreement to jointly develop properties in Singapore and China, the two groups will develop the condominium project on the 3.2 hectare site.
Based on data culled from 2007 to 2013, C&W found that the biggest Chinese investor in Singapore is the China Investment Corporation, which has pumped in an estimated $750 million.
This is followed by Hao Yuan Investment ($645.8 million), which is the developer behind the high-profile EC, Forestville, in Woodlands, and MCC Land ($473.3 million).