http://www.straitstimes.com/Money/St...ry_557804.html
Jul 26, 2010
Chinese developers eye S'pore property
Cash-rich firms spot growth opportunity here as cooling steps take effect at home
By Esther Teo
CHINESE developers eager for a slice of the red-hot housing pie are nudging their way into Singapore's property scene.
Chinese developers bid for at least 10 out of the 15 residential land sites put up for tender in the Government Land Sales (GLS) programme for the first half of this year.
They have landed three plots and narrowly missed out with second-place bids on at least two other sites.
MCC Land and Qingjian Group are two of the most active, although lesser-known Ningbo Construction Group unsuccessfully bid for a private residential plot in Tampines Road in May.
Property experts say this might herald a growing trend as Chinese developers, cashed up and eager to mitigate cooling measures that could derail property prices in China, shift their focus to Singapore where prices are expected to keep rising.
Their aggressive bidding could also be due to their lack of a landbank compared with local developers, and that many of their initial bids had failed to top the tender, experts say.
Mr Colin Tan, research and consultancy director of Chesterton Suntec International, said: 'Singapore is preferred as it is seen as a stable and safe market.
'Chinese developers will probably expand their presence here and I won't be surprised if we see more mainland firms coming into the property market.'
DMG & Partners property analyst Brandon Lee said that as most of the Chinese firms started out in the construction business, progressing to property development was not surprising as the margins were much higher.
'There are also an increasing number of mainland Chinese buyers entering the market, making up about 15 per cent of total foreign buyers, so the Chinese developers might be hoping to target this segment,' he added.
MCC Land's first attempt at a GLS tender was in March, for an executive condo site near Buangkok MRT Station. It fell a fraction short, tendering 1.4 per cent below the top bid of $193.3 million.
But it won the day with a $127.8 million bid for a site at Yishun, also in March. Last month, the firm clinched a Sembawang Road/Canberra Drive site for $131.7 million.
MCC Land is part of the Chinese state-owned enterprise Metallurgical Corporation of China (MCC Group) - a Fortune 500 company listed on the Shanghai and Hong Kong bourses. It is involved in engineering, procurement and construction, mining and property development.
While MCC Land is a new entrant, MCC Group's local construction unit, China Jingye Engineering Corporation, has been doing business here for almost 14 years. It was the main contractor for Universal Studios at Resorts World Sentosa.
MCC Land managing director Tan Zhiyong said that it was a natural progression to branch out into property development as it expanded its footprint here.
Although the firm is mostly involved in the residential market, he does not rule out entering the commercial sector if the opportunity arises.
'We don't have a fixed goal in terms of what we want to accomplish... If a good opportunity arises, we will act but this also depends on how the market moves, the timing and the location of a site,' he said.
Mr Tan added that while he does not expect property prices here to increase as fast in the rest of the year as they did in the first half, he expects values to remain stable and so might bid for more sites.
The other main player - the Qingjian group - also began operations here as a contractor for HDB projects. It marked its first foray into property development in 2008 with Natura Loft - an HDB design, build and sell scheme in Bishan.
Qingdao Construction - part of the Qingjian Group - has since clinched a site next to Potong Pasir MRT station for $113.7 million. Its bid of $607 per sq ft per plot ratio was a record land price for the area and ahead of more established property players like Frasers Centrepoint, Far East Organization and Hong Leong Holdings.
Qingdao Construction director Zuo Haibin said Singapore's growing economy provided a stable investment platform. He hopes to at least double the size of the firm's development arm in the next year and has identified sites in the upcoming GLS programme the firm may bid for.
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