Foreign investors put 30% more into local property

Foreign investors piled into local property last year, far outpacing the level racked up in 2012, said a DTZ report yesterday.

Investments from overseas hit $4.1 billion in 2013, a rise of more than 30 per cent on the previous year.

Investors from Asia comprised nearly 90 per cent, or $3.7 billion, of the spending, with Chinese buyers alone accounting for $2.9 billion of that.

This is almost triple the $1 billion they contributed in 2012.

Major deals last year included Bright Ruby Resources - a Singapore-incorporated firm controlled by a Chinese family - acquiring Grand Park Orchard in Orchard Road for $1.2 billion.

This was the year's largest deal, excluding those struck by real estate investment trusts and those involving the Government Land Sales (GLS) programme, DTZ said.

Other Chinese developers were also major participants in GLS tenders for private residential and executive condominium (EC) sites.

Two adjacent private residential plots in Upper Serangoon View were sold to Kingsford Development, a company owned by three Chinese nationals.

Japanese developers were also busy. The Westin Singapore hotel was sold to Daisho Group for $468 million in the fourth quarter of last year.

And Sekisui House, which is part of a joint venture with Frasers Centrepoint and Far East Orchard, won the GLS tender for a residential plot at Fernvale Close for $257 million.

The DTZ report said that "with Japanese developers diversifying and expanding their presence in Singapore and the region, their real estate investments in Singapore could increase further".

Property firms remained the largest buyers of real estate last year.

They made up about 55 per cent or $15.7 billion of investment activity compared with $15.1 billion in 2012.

The share of investments by foreign developers doubled to about 20 per cent last year compared with 10 per cent in 2012.

Ms Lee Lay Keng, DTZ head of Singapore research, said real estate activity is expected to moderate this year.

"While the near-term impact is not likely to be significant, the tapering of bond purchases (in the United States) could see investors seeking higher returns from their property (here)," she added.

Ms Lee added that this could mean property deals may take longer to be completed or investors could divert funds to other countries where they can get a higher return.

She noted that residential investments are also likely to fall further as collective sales continue to face difficulties while there are fewer residential sites on the GLS programme in this half of the year.

A CBRE report out yesterday summed up the total investment sales volume for 2013 at $29.72 billion, down 3.7 per cent from 2012. The public sector made up 20.1 per cent of that.

It noted that "investors are refraining from investing into large deals as they would prefer to spread their risks across a selection of smaller assets".

Source: Straits Times 9th January 2014

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Foreign investors put 30% more into local property

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