Wednesday, April 23, 2014



Credit Suisse to sell German properties valued at 700m euros

Credit Suisse Group AG is selling commercial buildings in Germany valued at about 700 million euros (S$1.2 billion) as it liquidates property mutual funds in the country, two people with knowledge of the matter said 

Suisse Group AG is selling commercial buildings in Germany valued at about 700 million euros (S$1.2 billion) as it liquidates property mutual funds in the country, two people with knowledge of the matter said.
Brookfield Financial is managing the sale, said the people, who asked not to be identified because the matter is private. Some of the 20 properties being sold are held by Credit Suisse's CS Euroreal fund and include the German headquarters of Royal Philips NV in Hamburg, one of the people added.
A spokeswoman at Zurich-based Credit Suisse and a spokesman at Brookfield Financial, a unit of Toronto-based Brookfield Asset Management Inc, declined to comment.
German property funds began winding down more than 25 billion euros of assets in 2010 after investors, shaken by the global financial crisis, sought more redemptions than funds could immediately meet. More than 13 of the 44 funds have suspended redemptions or are liquidating, noted Sonja Knorr, an analyst at Berlin-based Scope Ratings.

Mall of Berlin: The one billion euro mall will open next month with 76,000 sq m of retail space, apartments, a hotel and 1,000 parking spots. 

[BERLIN] When Harald Huth bought the former Wertheim department store site in central Berlin, he planned to build a mall with 200 shops for about 400 million euros (S$690 million). Three years and almost one billion euros later, he's set to open Germany's biggest shopping centre, with 270 stores.
The developer's growing ambitions reflect Berlin's emergence as a shopping destination. Retail rents in the capital climbed the most among Germany's big cities last year, driven by a surge in tourism and a growing population.

"In the past 10 years, Berlin has developed excellently," Mr Huth, 45, said. "The tenant demand we received gave me confidence that the project could be bigger." Germany's biggest city has been something of an emerging market in the decades of rebuilding that followed the fall of the Berlin Wall in 1989.

Though Berliners' incomes are still lower than the national average, the city is beginning to attract brands like Apple and Forever 21, which opened stores there last year.

Saturday, April 19, 2014


A Malaysian consortium made up by SP Setia, Sime Darby and the Employees Provident Fund paid 400 million pounds for the 39-acre power station scheme in July 2012.

Battersea home sales: priority to Londoners
254 apartments will be on offer only in London from May 1
[LONDON] Residential property in the second phase of the Battersea power station project in London will be offered for sale in the British capital before being marketed to overseas buyers, the scheme's Malaysian-backed developer said.
The decision comes in response to increasing pressure on builders to give Londoners priority for new homes in an effort to combat a housing shortage exacerbated by the droves of overseas buyers who have snapped up residential property in the city over recent years.
The power station, famous for its imposing quartet of art deco chimneys, stood derelict on the south bank of the River Thames for about three decades until the 15.8 hectare site was bought in July 2012 by a Malaysian consortium.
As part of the project's second phase, 254 apartments will be on offer in an exhibition that will be held only in London from May 1. They will range from studio flats to five-bedroom penthouses.


Hot demand for Battersea looks set to boost SP Setia earnings
Maybank analyst thinks sales will surpass its target by RM200m

New lease of life: Over the next 14-15 years, a mixed residential and commercial development with an estimated gross development of £8b will be built on the strategic location. 

If the London and Kuala Lumpur launches of the United Kingdom's Battersea Power Station project last week are anything to go by, the 100 residential units set aside for Singapore buyers are likely to be snapped up on Saturday.
Ahead of the Singapore launch on Saturday, a Malaysian consortium led by developer SP Setia reported all units showcased in London and KL had been fully booked.
This amounts to three- quarters of the 800 units under phase 1 called Circle West. Upcoming launches in Singapore and Hong Kong will be offered 100 units each.
A large crowd swarmed to the KL launch over the weekend where 400 units were offered with most buyers reportedly middle aged. Purchasers must pay a fifth by January 2014 and the balance on completion in 2016.   -- SINGAPORE BUSINESS TIMES

Friday, April 18, 2014


Shanghai Greenland

Not always the most prime but definitely the most agressive of all the China developers to go global.   They are one of China's largest state-owned developers.

Los Angeles

They stunned the market when they paid $1 bln USD for the Metropolis project in downtown LA. Acquired from the California State Teachers’ Retirement System in summer of 2013, the project is planned as a 275,450-square-foot (25,600-square-meter) development with hotels, apartments and luxury condominiums.


In October 2013 they announced a $5 bln USD investment to take a 70% stake in the Atlantic Yards.

In December 2013 they sold out 250 units in Downtown Sydney according to the Wall St. Journal.

Due to that success the group is expanding in Oz and it was  South China Morning Post  “We are looking for a few opportunities at the moment in Melbourne, Brisbane and Sydney, with total development values ranging from A$500 million (HK$3.58 billion) to A$3 billion.”


Greenland bought the historic Ram Brewery site in Wandsworth outside central London for £600 million and when a local London player fumbled it negotiations, Greenland stepped in quickly at Canary Wharf.   The above is rendering of the proposed Hertsmere Tower.


PETALING JAYA: The Greenland Group is the latest developer from China to buy land for a sizeable property project in Johor's coastal Danga Bay area.

Greenland  struck a deal in 2014 April to acquire 13.96 acres from Iskandar Waterfront Holdings Sdn Bhd (IWH) at cost of RM 600 million, where it plans to develop properties worth RM 2.2 billion in gross Development Value.

The price works out to RM 984 per sq ft - just below the record RM 991 per sq ft that Hao Yuan Pte Ltd, a Singapore-based but China-owned firm, paid for 37 acres in Danga Bay last December.

This is Greenland's maiden investment in Malaysia, for which it will form a joint venture with IWH to develop the land into an integrated project within five years.   But the sale comes amid reports of tepid response from buyers for launches in Johor and Iskandar Malaysia.

The latest to feel the heat was Singapore’s Pacific Star Development Pte Ltd, which saw bookings for only 25% of the second phase of its condominium in Puteri Harbour. 

Even so, the Shanghai-based Greenland, one of China's largest state-owned enterprises, is understood to be eyeing a GDV in excess of RM10bil in Danga Bay by the time it wraps up several more transactions in the coming months.

“This is only the beginning,” a source said.

According to industry executives, Greenland is set to finalise “very soon” the purchase of two more land parcels on the eastern corridor of Johor Baru near the Permas Jaya township, where Tropicana Corp Bhd is also a landowner.

Previous news reports had said Greenland was keen on acquiring around 60ha in Iskandar Malaysia.

Inclusive of the Greenland transaction, IWH has to-date inked 17 deals with local and foreign partners to develop properties worth RM127bil in GDV, providing a fillip to its ambitious plan of transforming the coastline of Johor bordering Singapore into a waterfront metropolis.

At least four other major China developers were in talks with IWH for mixed-use developments featuring waterfront properties, the company said in a statement.

“This massive influx of foreign direct investment is a boon for Malaysia and Johor because of the economic spillover and thousands of job opportunities that these projects will generate,” IWH managing director Tan Sri Lim Kang Hoo said.

“We believe Greenland Group will pave the way for more China state-owned companies to invest in outstanding property projects in Iskandar Malaysia and IWH’s extensive waterfront landbank in Johor Baru.”
A delegation from Greenland had visited Malaysia in February to explore investment opportunities. The state-backed group has over the past few years snapped up real estate in major cities such as New York, Los Angeles, Sydney, London and South Korea.

IWH is the master developer of 1,620ha of waterfront land in the eastern and western side of the Johor Causeway, with Danga Bay, located in Zone A of Iskandar Malaysia, as its centrepiece.

Other international property players which have secured a foothold in Danga Bay include Singapore’s Temasek Holdings Pte Ltd and CapitaLand Ltd, Australia’s Walker Group and China’s Country Garden Holdings Ltd and Hao Yuan, while local firms with ongoing developments include Tropicana and the Brunsfield Group.

Maybank IB Research had recently expressed concern about Iskandar Malaysia’s medium-term prospects, saying the massive incoming supply of residential and retail properties in hotspots like Danga Bay and Nusajaya could be harmful to asset values.

“Judging from the planned launches (serviced apartments, hotels, office and retail spaces) by Country Garden, Hao Yuan, Guangzhou R&F Properties Co Ltd, CapitaLand and Greenland Group, the hotspot areas, ie, Danga Bay and Tanjung Puteri, could be flooded with an enormous supply of high-rise mixed development projects, inducing price volatility,” it said in a client note last week.

“For instance, Guangzhou R&F plans to launch 15 blocks of 35-storey apartment buildings under phase 1 in the second half of this year, which implies an enormous 3,150 units of apartments, assuming six units per floor.
“That said, investor interest could return to developers with projects in Iskandar Malaysia on the finalisation of the Johor Baru-Singapore rapid transit system. Also, the listing of IWH in the second half could re-rate existing players in Iskandar Malaysia.”

PA International Property Consultants Sdn Bhd executive director V Sivadas told StarBiz that buyers were in “transition mode” due to changes in state policy and foreign ownership.

“People still have money, but they are being more careful about how they use it,” he said.  -- 2014 April


They acquired a development project in Korea


In March 2013 they announced a $360 million acquistion in Toronto but have yet to land their targeted development partner in Vancouver, B.C. which has been the hottest overseas real estate market outside Asia for the last two decades.


Greenland is biding its time before entering Singapore

To be in the right place at the right time underscores the reason behind Greenland Holding Group's decision not to enter Singapore this year but also drives its interest to do so next year.

Having turned away from tabling a bid for a land parcel here in August, the Chinese state-owned developer is now actively studying upcoming land tenders in Singapore, said Greenland group executive vice-president Xu Jing.

"Because Singapore's land supply is low, competition is more intense. That's why we have not entered Singapore yet," Mr Xu told foreign media recently in Shanghai. 

Given Greenland's strengths in mixed-use developments, the Shanghai-based developer is keen to undertake large-scale iconic projects in Singapore and Kuala Lumpur in Malaysia that will comprise homes, offices, hotels and retail malls.

"We hope to have a certain scale in our projects so that we have better control over project management costs," Mr Xu said. But the type of project that it will take on in Singapore will ultimately depend on the site's location and its land planning zone.

Greenland has already stood out among Chinese developers for its aggressive overseas moves in recent years, amid growing presence of Chinese investors in global real estate, and it is stepping up on its overseas expansion next year.

The group has already identified potential mixed-use projects in Kuala Lumpur, where it hopes to clinch them next year too.

"We are now in mature talks in Seoul, South Korea and Paris, France," Mr Xu added. "We may move into signing agreements soon."

Mr Xu explained that the group's internationalisation strategy began when it joined the list of top 500 companies globally in 2012 (ranked 268th), as the Shanghai government was encouraging Chinese companies in the Fortune 500 league to become international enterprises. Based on this year's targeted 400 billion yuan (S$84.8 billion) revenue, the group is set to rise further into the top 200 league.

Its headline-grabbing overseas moves included a US$500 million residential project in Sydney in 2013 and the US$1 billion mixed-use Metropolis project in Los Angeles. Greenland has invested in large-scale projects in South Korea's Jeju Island, including a healthcare town development project.

This year, Greenland acquired a historic site in Canary Wharf, London, for £600 million (S$1.2 billion) to build a mixed development, after its purchase of Wandsworth's Ram brewery site to build a tower comprising new homes and retail space.

It is also one of the biggest spenders in Malaysia this year, paying RM600 million (S$225 million) to Iskandar Waterfront Holdings for a 5.6 hectare site in Danga Bay, where it plans to develop properties worth about RM2.2 billion in gross development value. It also bought a 51.8ha plot in Jalan Tebrau, which it intends to start developing in about five years.

Greenland has since launched a preview for Greenland Jade Palace, a 759,609 square foot residential project in Danga Bay. Sales will begin around end-February next year.

Mr Xu said that pricing is not fixed yet as the costs computations and market forecasts are still being worked out.

Meanwhile, Greenland is seen trying to build up its brand in Singapore, going by the amount of prime-time television commercials that it has taken up recently. Some believe that it is drumming up interest ahead of its launch of the massive Jade Palace project.

Asked if he was concerned about the supply-demand dynamics in Iskandar, Mr Xu replied: "A good company will lead to create the market."

He recalled how Greenland started out some 20 years ago when Shanghai Pudong was still composed of tracts of farmland.

"We also asked ourselves the same question: 'Where are our customers?' But we have created the demand among Shanghai people - to have one apartment in the city and one villa outside the city. That was how we developed the market. This is similar to our Iskandar project, which is just across the causeway from Singapore."

In the same way, the group is hoping that its Johor projects serve as second homes for Singaporeans and, at the same time, meet the needs of local Malaysians.

Elsewhere, Greenland is seeking to gain a foothold in Thailand's luxury real estate market. It has lately teamed up with Thailand's Charoen Pokphand (CP) Group and Magnolia Quality Development Corporation to jointly invest 12 billion yuan in development projects, including luxury apartments, serviced apartments, retail and offices in Bangkok and Pattaya.  -- 2014 Dec 16   BUSINESS TIMES

Thursday, April 3, 2014


Chinese Investors Change Face of Dubai

Investment by Individual Chinese Investors Nearly Tripled Last Year

China market

2015 Sept 1 
In a dramatic change of heart, Beijing has reversed restrictions on foreigners buying residential apartments in China as it attempts to shore up its sluggish property market and reboot confidence in the economy.

Beijing has also partially relaxed rules on foreign capital requirements in wholly owned foreign enterprises investing in large-scale real estate projects. Foreign institutional investors no longer have to pay registration fees when taking out domestic and foreign 
loans to finance their property purchases, or when settling foreign exchange transactions.

Property is a significant pillar of the Chinese economy. Importantly, it is the collapse of the Chinese housing market that has partly been blamed for a growing outflow of capital into offshore markets

38% of Global GDP Growth in 2014 was from China

China Land Registry

Reuters photo

China issued rules requiring real-estate owners to register their holdings with authorities, a major step in the fight against official corruption that should make it harder for property speculators to evade regulations.
Until now, China has had no such registration requirement, an absence that has let some people use property as an opaque vehicle to hide assets from authorities.
The rules, issued on Monday and taking effect on March 1, are a key step in creating a nationwide property database. They were published by the State Council, China's cabinet-level political body. "All real estate assets - land, water areas as well as houses, forests and the like - will be subject to this set of rules," the announcement said. "The rules apply to the first-time registration, changes of ownership as well as property transfers, write-offs and asset freezing, among other things," it said.
Officials have said that China needs about three years to fully establish a unified registration system of real estate, and about four years to run a unified registration information management platform, which will support the country's fiscal and financial reforms

  • China's real estate Registration Rules

  • PUBLISHED MAY 13, 2014
    Latest China property step seen as a way to fight graft
    Academics confident that unified registration policy will deter and help uncover corrupt officials

    The new bureau will be in charge of registration of land, real estate, forest, grassland and maritime space. 

    OFFICIALS and academics have hailed the government's recently pledged unified real property registration policy, saying that it will help fight corruption. The central government established a government agency to supervise real property registration last Thursday as part of an effort to accelerate the registration process.
    The bureau, under the Ministry of Land and Resources, will be in charge of the registration of land, real estate, forest, grassland and maritime space. China plans to build a national real property registration system in about three years and make it operational for information sharing and queries in four years. A senior official with the new government agency said that the unified registration system does not target the housing sector specifically and its primary purpose is not to tackle corruption or curb home prices.
    But some academics said that unified registration will be a deterrent and will help uncover corrupt officials. Zhou Keda, a researcher with the Guangxi Academy of Social Sciences, said that the system would help make data on officials' home ownership more transparent and lead to discovery of evidence in potential corruption cases.
    Caixin is 'The Economist 'of China & Andy Xie is highly regarded so this article is worth reading -

    Developers’ caution in buying land could threaten local government finances

    Developers exercise extra caution as costs rise, dampening local government revenue hopes

    "Caution" is a word commonly used by mainland developers when talking about their land acquisition plans this year.
    That bodes ill for some local governments that are under pressure to refinance.
    Sentiment has soured quickly in the mainland's property market this year, pushing developers to play safe and make speeding up turnover a priority.
    "Volatility and polarisation have become industry themes now," Longfor Properties chairman and founder Wu Yajun said at an earnings news conference last month. "We will exercise extra caution when buying land in the future, as it is critical to buy the right land in the right city."
    Destocking and cost control have become the key words this year. This is the strategy not only for Longfor but also many other mainland developers.
    The whole industry is now suffering from lower profitability, as the cost of land and construction has soared much faster than property selling prices.
    Many provinces are reliant on land sales for a large portion of their revenues. While this revenue source has proven to be quite lucrative, it has also been highly volatile
    Even China Overseas Land & Investment, the country's biggest listed developer by market capitalisation, is turning cautious, although it was still aggressively snapping up land parcels until recently - spending 13 billion yuan (HK$16.2 billion) on four plots in February.
    "Land purchases must match property sales this year so that we can keep our finances healthy," company chairman Hao Jianmin said after announcing a conservative target of HK$140 billion for contracted sales, compared with last year's actual sales of HK$138.5 billion.
    "The competition for land in Guangzhou was much weaker than last year," Hao said. "I think [some developers] probably have not so much money left."
    Sean Li, Agile Property's head of operations, told the other side of the story.
    "To be frank, the land price in Guangzhou is a bit too expensive now," Li said.
    He said his company pulled out of a recent land auction in the city after bids surpassed the Guangdong-based developer's preset ceiling.
    The company has adopted a strategy of "shorter cycle, lower cost and quicker turnover".
    Mainland developers spent 100 billion yuan on land acquisitions in the first two months of this year, up 8.9 per cent from a year earlier, according to National Bureau of Statistics data.
    The growth rate was much slower than the increase of 33.9 per cent for the whole of last year to 992 billion yuan.
    With the housing market now cooling and sufficient land reserves on hand after aggressive replenishment last year, developers need to pause and rethink, CRIC, a real estate consultancy and a unit of E-House (China), said in a report last week.
    That will put to the test this year the resolve of cities in enforcing the property market cooling measures they have in place.
    Some analysts expect cities that are now suffering sluggishness in the housing market to switch to stimulus measures, as too much of their local economy hinges on a buoyant real estate industry.
    The most urgent priority is to repay debts. An analysis by global rating agency Moody's Investors Service of self-reported indebtedness of the nation's 31 provinces showed that 30 per cent or more of local government debts in Beijing and the provinces of Zhejiang, Jiangsu and Sichuan will come due this year.
    "Many provinces are reliant on land sales for a large portion of their revenues," Moody's said. "While this revenue source has proven to be quite lucrative, it has also been highly volatile."
    The National Audit Office said local government debts totalled 17.9 trillion yuan at the end of June last year, and 11 provinces depended on revenues from land sales for 37 per cent of the repayments.   -- 2014 Apr 1   SCMP