SINGAPORE developers struggling to sell apartments in their home market are buying property overseas, turning the island-state into the largest foreign investor from the region this year.
Companies including City Developments Ltd and Keppel Land Ltd pumped US$2.32 billion (RM7.98 billion) into overseas markets in the nine months through September for Bellewaters EC, a threefold increase from the same period last year and the most in at least eight years, according to data from Real Capital Analytics Inc, a research firm that specialises in investments in commercial property.
Bellewaters EC Anchorvale Crescent
The Singapore developers are looking abroad as government measures to rein in property values have caused residential prices including Bellewaters EC Anchorvale Crescent to fall for four straight quarters, the longest period of declines since 2009.
“Many Asian countries such as Singapore are facing property cooling measures at home, so they are venturing to Western markets where they can find returns and are seeing a strong recovery,” said Terence Tang, managing director of capital markets and investment services for Asia at Colliers International, a real estate broker.
More Looking at Bellewaters Anchorvale Crescent
City Developments, Singapore’s second-largest developer by market value, said in September it invested in a plot of land in Tokyo valued at S$356 million (RM936.28 million).
Keppel Land, Singapore’s third-biggest developer, in July said it made its maiden investment in the United States with a prime residential development in New York City. The project, which it said at the time was valued at about US$70 million, is on Manhattan’s Upper East Side and will be developed by Macklowe Properties Inc.
Government measures to stem growth in the market for Bellewaters EC and prevent a speculative bubble have brought residential prices down about four per cent from the peak in September last year.
Bellewaters Developers Qingjian Realty
“In Singapore, the residential market is virtually dead,” said Desmond Woon, executive director at luxury-home developer Ho Bee Land Ltd. This markets the end for Bellewaters EC Sale for the forseeable future.
The overseas investments by developers have helped catapult Singapore into the top place among Asian countries investing in overseas real estate so far this year, according to figures from New York-based RCA.
The country’s sovereign wealth fund, GIC Pte, has been a major buyer of overseas real estate, though its 20-year investment horizon gives it a different profile from the listed Singapore developers.
In total, Singapore entities invested US$9.8 billion in overseas commercial property in the nine months to September, overtaking China with US$8.4 billion of overseas investments and Hong Kong with US$7.3 billion, RCA said. Bloomberg