Tuesday, December 3, 2013

Project Sales : Asians buy off plans

Overseas developers making stronger pitch
They are prompted by the continued interest here in overseas projects
More overseas developers are opening property galleries or sales offices in Singapore to step up their marketing here, prompted by a continued interest in overseas projects - PHOTO: SUMANSA
'Singapore's property cooling measures, including a loans cap . . . have prompted Singaporeans to look elsewhere.'
HSR International Realtors' Wong Shanting
[SINGAPORE] More overseas developers are opening property galleries or sales offices in Singapore to step up their marketing here, prompted by a continued interest in overseas projects.
While most have traditionally relied on their marketing agents to hold property exhibitions here on weekends, there is a growing trend of foreign players wanting to have a permanent presence here.
In the course of a week, two overseas developers have joined the fray. Australia's Crown Group opened its sales office at Suntec Tower Two, while Malaysia's UMLand opened its property gallery in Anson House at Tanjong Pagar.
BT understands that London developer Galliard Homes is about to open a sales office in Singapore soon.
Together, they join several other industry peers from the United Kingdom, the Philippines, Malaysia and China who have opened shop in Singapore, including notable names such as UK's Berkeley Homes and China's Country Garden. The latter opened a sales gallery here to showcase its Danga Bay project in Malaysia.
"Booming Asia is an important platform for us and we want to be ahead of that trend," said Crown Group's Indonesian-born CEO Iwan Sunito. Overseas buyers make up 30 per cent of Crown Group's clientele, with Chinese and Indonesians forming the majority of this pool.
Sydney-based Crown Group, which achieved some A$20 million (S$23.3 million) of sales from buyers in Singapore last year out of A$300 million of group sales, hopes to reduce its reliance on agents here and derive more sales from direct marketing.
Its director of sales and marketing Adam Sparkes said that the Singapore office marks the start of a longer term plan of developing residential projects globally. Its first overseas office in Jakarta was opened last year.
The fast-growing Crown Group is also looking to set up an office in either Shanghai or Hong Kong within a year and to list the company within five years - possibly in Hong Kong.
UMLand's opening of its sales gallery is timed with the launch of its premium mixed-development Star Residences in Kuala Lumpur. "The presence of the property gallery will further enhance purchasers' confidence of UMLand," said group CEO Charlie Chia. "If the opportunity arises, UMLand will certainly be interested to venture into property development in Singapore."
UMLand has been marketing projects in Singapore since 2003 when its tie-up with Singapore's The Ascott Limited in Somerset Seri Bukit Ceylon in Kuala Lumpur, a strata-titled serviced residence project, drew significant interest from Singapore-based buyers.
Its sales gallery will now serve as a one-stop shop for potential investors and buyers to explore other projects in Iskandar Malaysia and Klang Valley.
HSR International Realtors analyst Wong Shanting noted that Singapore's property cooling measures, including a loans cap under the total debt servicing ratio (TDSR), and relatively high property prices have prompted Singaporeans to look elsewhere.
The high-speed rail between Singapore and Kuala Lumpur, which is targeted to be ready by 2020, will enhance Malaysia's draw, she said.
Mr Chia pointed out that new growth areas such as Iskandar Malaysia are only 30 per cent of Singapore's property prices. "With this push factor of TDSR, Singaporeans ultimately throng to Malaysia to enjoy better terms and ease of end-financing with Malaysian banks for their investments," he said.
Doris Tan, head of international residential properties at Jones Lang LaSalle (JLL), said that sales of London properties to Singapore buyers have slowed recently as many have already bought their units in the past few years.
And with rising prices in London and a capital gains tax on non-residents that will kick in next year, investors are adopting a wait and see attitude, she said.
Colliers International told BT that many of its clients still prefer to continue holding property exhibitions on overseas projects here due to the cost factor.
"It's very expensive for overseas developers to set up and fit out a permanent office in Singapore. This is why most of our clients rely on Colliers as their agent to sell their schemes, without them having the added expense of a local office," said Nina Davies, Colliers' operations director for international properties in South-east Asia.
However, there are still advantages of having sales representatives closer to potential buyers.
Malaysia's SP Setia Berhad has seen double-digit growth in annual sales to Singapore-based buyers since it opened a sales office here in 2009. Having a presence here allows the developer to provide better after-sales follow-up, said Neo Keng Hoe, SP Setia general manager for Singapore.
This move was also part of the group's international expansion into Vietnam, Australia, China, the UK and Singapore. SP Setia is behind the Singapore condos - 18 Woodsville and Eco Sanctuary - launched in 2012.
"We also market our investment grade developments in Kuala Lumpur, Penang, Iskandar, Melbourne and London and we do see growing interest for the Iskandar region," Mr Neo said.
"The TDSR encourages overseas property purchasers to secure offshore financing and developers with good proven records will continue to do well here," he added.

Developers Flock To Asia with their Developments

Photo credit:  Fiona Batholomeuz

The interesting thing for western developers is that Asians are used to purchases of real estate off plans and they are willing to put a firm deposit for their pre-commitment for product that won't be completed for a few years.

Overseas property galore for buyers


Overseas property continues to lure local investors with developers seeming to jet in to Asia every other weekend offering new launches.

In Singapore it was reported:  

DTZ Singapore research head said about 107 London projects alone, including student accommodation blocks, have been brought to Singapore for sale by various agencies this year.  

Consultancy Colliers International data shows an increasing number of Singapore investors have been buying London property over the past 12 months, about 25 per cent more than a year earlier.

Savills Singapore says: "It is hard to track the number of different launches in Singapore but we have certainly seen an increase in the number of launches this year compared with last year."

He says this could be due to cooling measures in Singapore and an increase in local agencies trying to sell international property.

"The key cities of interest are London, Sydney, Melbourne, Bangkok, New York, Kuala Lumpur, Tokyo and growing interest in Manila," he adds.

Jones Lang LaSalle has also seen strong growth in sales for these cities. "We sold close to 800 units of London properties to Singaporeans, which is about 80 per cent of the total property purchases made this year, and about 150 Tokyo properties to Singaporeans as well."

Singaporeans are also among the top foreign investors in the Bangkok condominium market, accounting for 18 per cent of CBRE sales to overseas buyers this year, says , managing director at property consultancy CB Richard Ellis in Thailand.

"Singapore is ranked second after Hong Kong in terms of top foreign investors in Bangkok's downtown condominium market," she adds.

However, there are certain risks and restrictions in the various cities and countries when it comes to buying property overseas.

Australia has restrictions on overseas investors wanting to buy pre-existing properties, according to Savills' Australian office.
If you are looking to move there, Australia's Significant Investor Visa requires an investment of A$5 million (S$5.7 million) in complying investments for a minimum of four years before being eligible to apply for a permanent visa.
CBRE's says buying condo units in Thailand is the simplest and safest for foreign investors while serviced apartments are not available for individual sale. Foreign investors cannot own land in Thailand.
She adds: "Most foreign investors, including Singaporeans, therefore choose to invest in freehold condominiums."
There are so many options on the table that there seems to be something for every investor in each city, depending on the bud-get.
Take a buyer with $500,000 to $600,000 to spend.
Savills says: "You are looking at a one-bed (flat) in a zone two location of London or a high-end condo in Thailand. In Melbourne, you could be looking at a one- or two-bed in the central business district and perhaps a one-bed or studio in Sydney."     >>  MORE  2013 December 3  STRAITS TIMES

The New Asian Rich - Young & Global

With the global economy still in flux, devlopers around the world are looking to capitalise on the affluence of Asians.

Asian Practise of Oversubscription

    While the sales practice used by developers is similar to companies seeking an initial public offering in the stock market, it is less transparent. For instance, developers that sell their units batch by batch request interested parties to submit checks for an amount that is randomly set by them. This could range from HK$150,000 to HK$300,000 for each check.

    But unlike in an IPO, developers allow each individuals to submit multiple checks and make multiple registrations.

    In the case of an oversubscription, developers use a ballot to allocate flats to homebuyers, a practice similar to when IPOs are oversubscribed.

    Similarly, potential IPO investors, amongst other information, look at subscription figures, which are tracked by brokerages during an offering, to decide whether to apply for the firms shares.

    But a market expert was quick to remind potential flatbuyers that they should not be taken in by the thousands of people who are attracted to the projects as it is all part of a promotional gimmick.

    If a developer sets the check amount at HK$150,000, and each individual is allowed to submit two registrations, that will give a different picture to that of another developer who has set the amount at HK$300,000 for each persons submission, the expert said.   --  2013 November 28   THE STANDARD

  • Why figures don't give the real picture
  • 'Property' is a hobby/another derivative for Asian investors
  • Greenland's sell out in Oz  >>  Greenland fetches A$275m from flats sales in Sydney10 Dec 2013

More than 200 Riverbank units snapped up
UOL Development spokesman reports strong take-up for one, two-bedroom and loft units
BT 20140215 LKRIVERBANK15UM02 959752
Buyers throng the Riverbank @ Fernvale in Sengkang sale. It is one of the developments in the north-east region earmarked under the Draft Master Plan as a new centre for growth
MORE than 200 units at Riverbank @ Fernvale in Sengkang were sold when 250 units of the 555-unit condominium project were released for sale yesterday.
Hundreds of potential customers packed the showflat in its first day of launch and the buyers include both investors and owner-occupiers.
"We have a strong take-up for one, two-bedroom and loft units," said a spokesmanfrom UOL Development. "There was also a strong interest for bigger units. Of the 17 five-bedroom units, 10 units were snapped up.
Doris Ong, senior vice-president of ERA Realty, the marketing agent for this project, also told BT that the one to two-bedroom units that were released yesterday were sold out.
"This weekend, we will be releasing more three-bedroom units which are ideal for owner-occupiers, with prices starting from $870,000," UOL spokesman said. Units at Riverbank @ Fernvale are sold for an average of slightly over $1,000 per sq ft (psf). The project comprises one to five-bedroom apartments ranging from 495 sq ft to 1,389 sq ft while the Cabana units, which are ground-floor apartments with sun lounger and private carpark lots are going for about 1,200 sq ft each.
Located right next door is a competing 495-unit project known as Rivertrees Residence, jointly developed by Frasers Centrepoint, Far East Orchard and Sekisui House. Slated for launch on Feb 22, the average price for units sold in the initial phase will be in the range of $950-$1,150 psf.
Both projects are nestled in the north-east region earmarked under the Draft Master Plan as a new centre for growth. Analysts say that they expect strong buying interests from both owner-occupiers and investors for these projects. But they note it is early days to tell whether this location will deliver the expected returns for investors.
"The location is shaping up to be an appealing residential enclave . . . especially for HDB upgraders," said R'ST Research director Ong Kah Seng. "This is a promising area but for those buying to invest, it is not a certainty if the investment potential will pick up eventually."
Mr Ong explained that rental yields would be challenged by substantial new completions of non-landed residential units in suburban areas in 2014 and 2015. At the same time, Western expatriates tend to prefer projects of a smaller scale, compared to 300-500 unit projects.
"Investors are hopeful but it is unclear if it can provide the expected rental yield," Mr Ong added. But for those who can afford to stay in the units if they do not rent them out, "there will also be some resale value in terms of price appreciation".
Jones Lang LaSalle Singapore research director Ong Teck Hui noted that there have been more tenants looking for units in the Seletar area in recent years given the development of the Seletar Aerospace Hub. "It is hard to say if rental yields would be attractive but if the Seletar Hub grows strongly in the future, the prospects might be better," he said.
David Tan, a father of two, was among HDB-upgraders who bought units at Riverbank @ Fernvale yesterday. "It was quite worrisome because there were so many people. I was so afraid I would not get the unit I wanted," he said.
Mr Tan eventually got his top choice - a three-bedroom loft unit on the first floor - for close to $1,050 psf. He said the unit offers "an unobstructed view of the Sungei Punggol river and new year countdown fireworks".

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