Singapore’s cooling measures have caused property firms to ramp up their overseas diversification efforts, with Australia, the UK and the US emerging as favoured destinations, revealed media reports.
Chia Siew Chuin, Director for Research and Advisory at Colliers International, said: “New and adjusted local government policies in recent years that were meant to prevent a real estate asset bubble from forming and bursting, have, somewhat, limited the opportunities here for investors and developers.”
“In addition, the property playing field in Singapore has matured with many players bringing more diversity into the game, hence increasing the level of competition,” she noted.
Companies that have ventured into Australia’s property market include Hiap Hoe, Aspial, AIMS AMP Capital Industrial Reit and Suntec Reit.
“The attraction of Australia (lies in its) high yield relative to other markets globally,” said Andrew Bird, Chief Investment Officer (Property) at AMP Capital, adding that prime Australian properties offer yields of about six percent.
London has also become an investment hotspot due to its reputation as a stable financial centre, said Chris Brooke, CBRE’s Executive Managing Director for Asia.
“Asian developers buying institutional Grade A office assets in London are driven by the feeling that London is a stable financial centre, offers reasonable yield, and is a long-term core holding. There is also the desire to have a flagship property in London,” he said.
“(On the residential front) it is a good market to be building high quality residential homes notwithstanding the capital gains tax. The feeling is that demand will remain, even though it may trail off a little bit.”
Oxley Holdings and City Developments Limited (CDL) were among the first companies to venture into the London market over the last 12 months.
US properties have also drawn interest from Singapore developers, with SingHaiyi group, formerly known as SingXpress Land, OUE as well as GIC acquiring properties there.
Meanwhile, Keppel Land has looked beyond these destinations, buying land in Indonesia, while CapitaLand has acquired another site in China. Oxley Holdings, which is one of the most active overseas property purchasers, now has ventures in Malaysia, Cambodia and China.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
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