THE cooling real-estate market in China has prompted mainland Chinese investors to put their cash to work in overseas properties, with Singapore emerging the second most-preferred outbound destination in Asia after Hong Kong.

Abundant liquidity among developers, investment institutions and wealthy individual investors, supported by a rising renminbi, are also driving the current capital outflow, Cushman & Wakefield said.

From 2008 till June this year, the Chinese pumped US$3.23 billion (S$4.18 billion) into Singapore's real-estate market. Half of that was spent on development sites and nearly a quarter (23.8 per cent) on retail assets, said the property consultancy.

This trails the US$3.84 billion put into Hong Kong real estate by mainland Chinese investors over the same period.

A string of high profile deals by Greenland Holding, China Vanke, Dalian Wanda, Country Garden and Fosun International have drawn attention to the growing presence of Chinese investors in global real estate.

Overall, Chinese investors spent US$33.7 billion on 353 deals from January 2008 to June 2014.

The US$5.1 billion spent in the first half of this year was almost equivalent to the amount spent for the whole of 2012.

The most popular investment models for Chinese investors are greenfield investment and mergers and acquisitions, Cushman & Wakefield said in a recent report.

Private enterprises and individuals accounted for 62.6 per cent of the total value of outbound investments, and state-owned enterprises, 37.4 per cent.

Chinese investors seem to prefer mature markets: The US was the top destination for Chinese real-estate dollars, registering 124 deals worth US$9.72 billion; of this, more than US$7.05 billion was spent in 2013 alone.

This is followed by the UK (US$5.8 billion), which accounted for 62.7 per cent of the total Chinese real-estate investments in Europe.

Cushman noted that the Chinese have also warmed up to South-east Asia, given its proximity to China and its strong presence of ethnic Chinese communities. Malaysia has also emerged a hotspot, with Chinese investors pouring in US$2.07 billion there over the same period.

While Chinese investors are generally drawn to strata-titled offices in Singapore, they prefer land development in Malaysia, Cushman noted.

In Europe, Chinese investors favour commercial real estate.

Shanghai-based, state-owned Greenland stood out for its aggressive moves in recent years, including a US$500 million residential project in Sydney in 2013 and the US$1 billion mixed-use Metropolis project in Los Angeles. Shenzhen-based Vanke teamed up with New York's Tishman Speyer to build a luxury condominium in San Francisco last year.

After Beijing gave the go-ahead to Chinese insurers to invest a percentage of their assets in prime commercial assets, Ping An insurance snapped up London's iconic Lloyd's Building in 2013 for £260 million (S$528 million); China Life jointly acquired a landmark office tower in London's Canary Wharf with Qatar Holding at £795 million this year.

Cushman said it expects the Chinese outbound investment trend to continue, as wealthy individuals and cash-rich companies look further afield to diversify and expand their global presence. Smaller and lesser known firms are also starting to follow the trail blazed by top-tier developers and investors.

The property consultancy pointed out however, that while the impetus for outbound investment among Chinese investors was strong, challenges are in the way. The lengthy approval procedure to transfer large sums of money out of China is "a significant issue" in fast-moving markets, where deals need to be closed quickly.

"Chinese investors also face a steep learning curve with differences in corporate and management cultures, divergent business practices and unfamiliarity with foreign legal and regulatory environments," Cushman said.


Source from Business Times
http://www.businesstimes.com.sg/real-estate/singapore-2nd-top-asia-destination-for-china-real-estate-investors

THE Urban Redevelopment Authority (URA) on Tuesday launched the second land parcel in Paya Lebar Central for sale by public tender.

The 3.9 hectare (ha) mixed-use site, which can generate about 165,000 sq m of gross floor area, is slated for office, retail and residential use.

URA said it will be a key development in the Paya Lebar Central, and build upon Paya Lebar Central's transformation into a major commercial centre on the city fringe.

The plot of land is in a precinct which has about 12 hectares (ha) of land for development and a total potential commercial floor space of about 500,000 sq m.

URA said the site at Paya Lebar Road / Sims Avenue next to Paya Lebar Interchange MRT station enjoys direct connection to both the Circle Line and East-West Line stations. It also has excellent frontage along Paya Lebar Road, Sims Avenue, Tanjong Katong Road and Geylang Road.

At least 90,000 sq m of the maximum permissible gross floor area will be set aside for offices; the remaining gross floor area can be for additional office, retail, entertainment, food & beverage (F&B) and residential use, and contribute to the attractiveness of the development as a destination for business and leisure, said the URA.

A tender period will last about 22 weeks, and close at noon on March 31, 2015.

The sale of this site by public tender follows that for a site at Paya Lebar Road / Eunos Road 8, which was launched for tender in late January 2011 for commercial use. It was successfully awarded to the highest tenderer in late April 2011.


Source from Business Times
http://www.businesstimes.com.sg/real-estate/ura-launches-tender-for-the-second-land-parcel-in-paya-lebar-central

WITH new rules to raise productivity in the construction sector kicking in on Nov 1, the first government land sale (GLS) site to come under the new requirements is an Upper Serangoon Road plot. Two other GLS sites - at Yishun Avenue 4 and Jurong West Street 41 - are also selected for prefabricated pre-finished volumetric construction (PPVC), on top of meeting the new requirements.

The Building and Construction Authority (BCA) said it works closely with other agencies to select suitable GLS sites for PPVC, which involves assembling whole rooms or apartment units that are manufactured off-site. Selection factors would include the number of residential units for economies of scale, the surrounding road access and traffic volume, it said.

From Nov 1, projects built on GLS sites have to meet higher building design and constructability standards. Developers who bid for GLS sites will also have to meet a certain level of prefabrication, such as using drywall as internal partitions in residential sites.

For selected sites, developers have to adopt productive technologies, including PPVC for hotels and residential projects, and cross-laminated timber for low and medium-rise buildings. Residential sites are required to use prefabricated bathroom units, while industrial sites need to meet a minimum level of prefabrication.

To give prospective tenderers of the 99-year leasehold site at Upper Serangoon Road more time to factor the new requirements into their bids, the URA said on Thursday that it is extending the tender closing date to Nov 27 from Nov 13. The roughly 10,000-square-metre plot is expected to yield 340 homes, with commercial units on the first floor.

Property consultants were earlier expecting about 10 bidders for the site, with a winning bid of between S$650 and S$750 per square foot per plot ratio (psf ppr), based on previous reports. The implementation of the new requirements, however, is widely expected to translate into higher costs in the short term.

R'ST Research director Ong Kah Seng now expects the top bid to be S$600-650 psf ppr, down from his earlier forecast of S$620-650 psf ppr, as he believes developers will factor in rising construction costs and higher development risks. He reckons that those developers who are also contractors would have more confidence in estimating construction costs.

SLP International executive director Nicholas Mak noted that the increase in the demand for prefabricated parts could mean higher costs for his company since the number of pre-fabrication factories is limited in the short term.

"As a result, the increase in construction cost can either lead to a fall in GLS land tender prices or an increase in future property prices. Land tender prices are unlikely to fall if the GLS land sites are considered attractive by developers."


Source from Business Times
http://www.businesstimes.com.sg/real-estate/unveiled-first-government-land-sales-under-new-bca-rules