Posts tagged real estate
In a first-ever joint venture between the neighboring sovereign wealth funds, Singapore’s Temasek Holdings Pte Ltd and Malaysia’s Khazanah Nasional Bhd are planning RM30 billion (US$9.86 billion) worth of cross-border development projects in Singapore and the Iskandar Malaysia region.
Business Times reports a large portion of the money invested will be in Singapore, with Khazanah owning 60% of a new joint venture project called M+S Pte Ltd with a Gross Development Value (GDV) of RM27 billion ($8.87 billion). The development, in Marina South and Ophir Rochor, will be a mixed-use residential, office, retail and hotel complex of over 500,000 square meters in gross floor area.
On the Malaysian side, Khazanah and Temasek will be equal partners in a RM3 billion ($986 million) GDV project named Pulau Indah Ventures Sdn Bhd with a gross floor area of 1.37 million square meters starting in Johor’s Medini North and the Heritage Cluster at Medini Central. The project, in the vast Iskandar Malaysia development region bordering Singapore, will “build on the momentum” of the development’s existing and planned projects with commercial, retail, health and residential facilities, many of which Khazanah has played a part in since the beginnings of Iskandar in 2006.
The two government-controlled companies will work closely with established real estate development firms in both countries, like Malaysia’s UEM Land Holdings Bhd (Khazanah’s property arm) and Singapore’s Mapletree (part of Temasek’s portfolio) and CapitaLand.
source & article: Business Times
Indonesia got a visit from New York property behemoth the Trump Organization this week, with its executive vice president and heir to the famous name Donald Trump Jr. impressed at what he sees as a “potential property gold mine” as the regional economy grows.
Donald Jr. was on a research mission to Indonesia with plans to set up a base, holding talks with local property interests Lippo Group and Bakrie Group. While he said it was too early to discuss numbers or partnerships, he confessed that the scene in Indonesia was “totally different” to what he imagined it would be, with a growing wealthy class and a “robust domestic market forming”.
In this interview with the Jakarta Globe, Trump also said his organization was “very bullish” about Asia in general and that they would go wherever wealthy classes were growing the fastest. The Trump Organization, an American institution in the real estate, retail, commercial property, hotel and golf worlds, has been looking outside North America to Asia and Eastern Europe as its home market still struggles to regain confidence after the 2008 financial crisis.
As for Indonesia’s growing number of wealthy, an additional 7 million were joining the middle classes every year and the combined wealth of the country’s 150 richest individuals jumped 75% from last year to US$107.9 billion. The national per capita income, currently $3005 a year, should reach $5000 a year on current projections.
source & articles: The Jakarta Globe
The Iskandar Malaysia Special Economic Zone project is already benefiting the economy and people of Johor “profoundly”, said the state’s Menteri Besar (Chief Executive) Abdul Ghani Othman. Since Iskandar’s beginnings just five years ago, it has delivered to the region increased demand, higher wages, greater business opportunities and a higher standard of living.
Special attention from the federal and state governments has helped too. Under the Ninth Malaysia Plan (9MP) Johor state received RM6.83 billion (US$2.25 billion) in federal funds to improve infrastructure and other public amenities, while its current successor the Tenth Malaysia Plan (10MP) has promised another RM1.39 billion ($459.9 million) between now and 2015. The state government responded with RM313.33 million ($103.5 million) of its own in 2010.
Almost all the funds went towards improving economic efficiency, accessibility and connectivity. Highway improvements alone took advantage of Iskandar Malaysia’s location between Kuala Lumpur and Singapore, allowing it to attract big name and ‘prestige projects’ like the Legoland theme park. Ghani said the property sector in particular has seen a sharp increase in demand, restarting projects stalled after the financial crisis and creating higher-end development opportunities in locations like Danga Bay.
As another sign of its commitment, Johor state relocated its administrative functions to a new development at Kota Iskandar, Nusajaya City, in 2009. The federal government also located its local departments there as part of the Johor State New Administrative Centre (JSNAC), a 1.3 sq km development complete with public plazas, gardens and parks.
source & article: New Straits Times via CBC BNet
The Singapore government has taken further steps to curb rising property prices and cool the market, after initial measures had only a minor effect on real estate buyers’ mood.
The new rules, effective from today, include stamp duty charges on all properties resold within four years of purchase (previously three), and individual investors servicing an existing loan will only be able to borrow 60% of the value of a new property (previously 70%). Corporate investors are restricted to 50%.
Singapore property prices reached record levels in 2010, with private home prices rising 17.6%. With liquidity in the sector still quite high and money coming in from overseas, the government feared an asset bubble. Hong Kong and China faced a similar situation, with their governments introducing even tougher measures to curb the excitement such as a 15% Hong Kong tax on properties held for less than six months.
source & article: Reuters via The Edge Property
Maybank is taking advantage of the Malaysian ringgit’s current higher value against the pound sterling, setting up a facility to allow customers to take ringgit loans to buy property in London.
The ‘Overseas Mortgage Loan Scheme’ expects a takeup of RM60 million ($19.7 million) as Malaysians buy commercial and residential properties in prime London locations like The City, Kensington, Westminster, Knightsbridge and Chelsea. Malaysia-based financing will be available for up to 85% of purchases with flexible payments and terms of up to 30 years or 70 years of a customer’s age (whichever comes first).
Until now, Malaysians interested in UK property had to take pound loans through UK-based banks, subjecting themselves to the risks of currency value volatility and were limited to purchasing ‘buy-to-let’ properties, rather than own occupation.
Maybank said it expects applications to peak early in the year, as the UK would institute a new 5% property tax on properties over 1 million pounds from April. The ringgit’s improved value and lower real estate prices have seen a recent surge in interest among high net worth Malaysians looking to buy in western European properties, either as investments or as housing for children studying overseas.
source & article: The Edge Malaysia
Suburban retail rents, like many other property-associated prices in Singapore, have been rising in recent years. That growth is likely to slow down as around a million sq ft of new space became available in 2010 and another 800,000 sq ft will come online over the coming year.
That suburban addition makes up about 60% of all new retail space available in Singapore. The new supply has increased suburban prices and narrowed the gap between rents in local malls and those in prime central shopping areas like Orchard Road, which have been falling. At the beginning of 2010 the difference was 12.6% and now stands at only 3.6%.
Suburban retail rents grew 2.8% to S$29.10 per sq ft last year. More space will continue to be added this year and in 2012, most notably from locations like Clementi Mall, CapitaLand’s JCube and Frasers Centrepoint’s Changi City Point.
source & article: PropertyGuru via Yahoo! Singapore
Condo developments aimed at the mass market (under S$1,000 per sq ft) will likely drive Singapore’s property demand this year, as more look for ‘safer’ investments amid low borrowing rates and rapidly increasing real estate values.
In a move to cool the market somewhat, the government banned private property owners from simultaneously owning a government Housing & Development Board (HDB) flat in August last year. This move, plus an influx of foreign workers looking for either investments or just more affordable housing, should see increased interest in the cheaper properties.
It’s also a sign that foreign investors see some risk in the higher end of the market, yet still retain enough confidence that some Singapore prices will rise further. Other speculators’ favorites in the region, like Hong Kong, have introduced tougher cooling measures like a 15% stamp duty on properties sold within six months of purchase.
source & article: Channel NewsAsia
Efforts in China to cool the local property market are serving up bargains to Singapore investors, according to TodayOnline. Increased interest rates and suspension of mortgages on third homes, plus rumors of new property taxes, have stalled or even lowered prices. Prime sites in the most attractive Chinese cities are now available to foreign investors who might otherwise have stayed out.
Singaporean companies like CapitaMalls Asia (CMA) and City Developments (CDL) have seized the chance. CMA bought a 66% stake in a S$747.2 million (US$578.5 million), 24,000 sq m Shanghai retail and office complex in November, then followed up in December with its announcement of a joint venture with Chinese developer CapitaLand China (and others) to build Shanghai’s second Raffles City complex for S$1.6 billion (US$1.24 billion). CMA now has S$7.3 billion invested in China with plans for a further S$2 billion, and a goal of 100 shopping malls over the next five years.
CDL is focusing on the residential market through its subsidiary CDL China, with a $45.7 million, 27,000 sq m residential complex in Chongqing. The company has big plans for China, and has identified 12 cities as targets for expansion.
source & article: TodayOnline
Indonesia’s banks are salivating at the prospect of a overseas-led property boom as restrictions on foreign ownership are hopefully relaxed next year. Some are estimating inflows of US$3 to 6 billion in property investment should parliament vote in favor.
In this article, Bank Tabungan Negara (BTN) CEO Iqbal Latanro sees a chance for Indonesian banks to begin a rapid expansion, as property prices in the cities increase and the economy grows to allow more people to access loans. BTN is the smallest of four state-owned banks but is the country’s largest mortgage provider. To back up that confidence, It is planning to open 200 new branches next year and is looking to raise Rp2 trillion (US$222 million) through bonds and Rp1 trillion by asset securitization.
BTN’s expects to make a Rp790 billion ($87.5 million) in 2010 — a big jump from its Rp490.45 billion ($54 million) in 2009. Should things continue to go well, Latanro projects profits will rise another 50% to Rp1.2 trillion. The bank has raised Rp1.9 trillion since going public a year ago, and shares have risen 94% since then.
source & article: Reuters via The Jakarta Globe
M&A activity in Singapore almost doubled that of 2009 in value, with US$40.7 billion worth of deals taking place. That value is expected to continue increasing in 2011, dominated by expansion of the real estate sector.
Not only that, but the number of outbound Singapore acquisitions increased more than 500% on last year, amounting to $23 billion worth. The figure includes the Singapore Exchange’s (SGX) proposed acquisition of the Australian Securities Exchange (ASX), worth $8 billion. Australia and Hong Kong were the biggest destinations for outbound acquisitions.
After the SGX-ASX deal (yet to be fully approved in Australia) the largest acquisitions were of CapitaLand China-Orient Overseas Developments ($2.2 billion) and Investor Group Banco BTG Pactual ($1.8 billion).
Analysts are predicting most action will come from real estate next year as the many Singaporean REITs looked for local acquisitions to build up their portfolios. Financial services will also figure but aren’t generating much excitement, while the energy sector looks set to benefit from developing economies in the region, after a 45% fall in M&A activity in 2010.
source & article: Channel NewsAsia