Singaporeans biggest asset buyer group in China

Singapore’s investors have made a strong entry into China’s property market, emerging as its biggest asset buyer group.

Real estate investments by institutions and individuals from Singapore rose to 34.65 billion Yuan (USD5 billion) in 2018, or 42 per cent of the total spending by global capital in China, according to data by real estate agency Cushman & Wakefield.

“Asian investors, particularly those from Singapore, have the know-how and rich experience in China’s property market,” said Alvin Yip, head of Cushman & Wakefield’s capital markets for Greater China, as quoted in a South China Morning Post report. “They hold a long-term view on the Chinese market, and they are unlikely to be deterred from pursuing solid assets by the trade war.”

While Singaporean investors have quiet for a few years, they have been looking at Chinese assets since 2008, waiting for golden opportunities, Yip added.

Singapore’s largest developer CapitaLand paid 12.8 billion Yuan in November 2018 for the Star Harbour International Centre on the north bund of Shanghai’s Huangpu River—in what was the largest single foreign purchase of Chinese real estate. Singapore’s Government Investment Corporation (GIC), the country’s sovereign wealth fund manager, contributed to half the purchase. The project includes a pair of 50-storey grade A office towers and a seven-storey retail mall. which has been turned into CapitaLand’s third Raffles City shopping centre in the commercial capital.

Foreign investments in China’s commercial property nearly doubled to 82.4 billion yuan in 2018, from 42.8 billion in 2017, and the upwards momentum is expected to continue due to the high annualised investment returns, which can hit 10 to 12 per cent for an ideal property in top-tier mainland cities such as Shanghai.

“We will continue to be a net asset buyer in China,” said Puah Tze Shyang, chief investment officer of CapitaLand China. “The trade war could have an impact on China’s economic growth, but we are still bullish on the market.”

Yip adds, “The trade war has a minimal impact on their decision making. They (foreign investors) are keeping their asset allocation strategy unchanged, and they need to invest part of assets in China.” ― Construction+ Online