New yields for Japan’s properties

With the rise of the popularity of Airbnb and with travellers flocking back to Japan, property owners are finding themselves in the midst of a  short-term accommodation boom. Hotels may not quite fancy this turn of events, but the property market, property owners and investors could be rejoicing. The number of travellers entering Japan is expected to grow to a whooping 21 million in 2016.

JapanPropertyThose who have been quick to jump on the bandwagon may already be reaping in some profits, as properties in popular districts and in particular those close to major train stations are in strong demand from travellers within and outside of Japan. The Shibuya district in Tokyo is an excellent example. As a major landmark and with connecting trains to 10 different lines (including the important Yamanote Line) and the Narita Express, properties in its vicinity are seeing a huge increase in short-term bookings.

Photo credit: www.japan-guide.com

Photo credit: www.japan-guide.com

And with the Tokyo 2020 Olympics just 4 years away, Japan’s hotel chains could be facing a shortage of accommodation and these privately-owned apartments could very well be a welcome relief to the city and help property owners earn a tidy sum at the same time. The number of platforms out there that connect property owners and travellers are growing and new launches though few will no doubt garner strong interest from investors.

 

Weaker UK pound drives up property market interest

Following Brexit, the Sterling pounds to Singdollar exchange rate have fallen from S$1.85 to S$1.7437 as of last Friday. The 16 per cent fall, since the pound started at S$2.0847 in the beginning of 2016, may be the reason behind a sudden spike in interest in British properties, especially those in London and Manchester.

Photo credit: OrangeTee.  Downtown Apartments in Manchester, UK.

Photo credit: OrangeTee.
Downtown Apartments in Manchester, UK.

Real estate agencies have understandably began to market British residential properties, with a few new launches coming up. These include JLL‘s London City Island apartments and Atria in Slough, and OrangeTee’s Downtown apartments and Property Group’s Affinity Living Riverview apartments in Manchester.

JLL’s London City Island apartments, which is jointly developed by Ecoworld and Ballymore and situated near Canning Town Station, will be launched soon, on 27 and 28 Aug. Also in London, but towards the west, is the 108-studio apartment development Atria, in which Oxley Holdings has a 20 per cent stake. Over the Manchester, buyers will have a couple of options to choose from with the 368-unit Downtown or 318-unit Affinity Living Riverview residential projects. With a variety of apartment types including studio, one-, two- and three-bedders to whet their appetite, buyers may wish to research property and rental potential, neighbourhood popularity, transport convenience and financial longevity before closing a deal.

Property experts caution against the risks of overseas property investment, in particular currency exchange fluctuations and maintenance costs. Despite the lure of the weaker pound, there may also be corresponding concern about the future of UK’s economy and the effect it has on property sales and rental prices.

Investors go big on Batam

Just a decade ago, Batam may not have been the place investors consider fertile for property development. But with the hospitality scene booming and visitors on the rise, more property developers have big plans for the island.

NuvasaBay

Photo credit: Nuvasa Bay project by Sinarmas Land

Besides the usual beach resorts, Batam was previously known more to be a highly-industrialised city. But the Indonesian government has been working on revising land laws for foreign investors and that could be the main push factor behind this recent interest in Batam. Already popular as a tourist destination, Batam’s land prices are also highly competitive, with immense potential for population growth and infrastructure development. Like in emerging markets such as Cambodia and Myanmar, the distance which property prices could travel is much more far-reaching than in saturated markets where property prices are already sky-high.

NuvasaBay3Photo credit: Nuvasa Bay project by Sinarmas Land

Developer Tuan Sing has recently joined the ranks of investors flocking to the island with their development of Marina City, a 85-hectare integrated mixed-development township which will include 2,000 apartment units, a hotel and also retail and entertainment facilities. Other investor favourites include the Meisterstadt project launched earlier this year by Pollux Habibie, the company owned by former Indonesian President B.J.Habibie; and the 228 hectare Nuvasa Bay project by Sinarmas Land, which will eventually yield up to 200 apartments and landed houses. Indicative prices are at $40,000 for a studio or one-bedroom apartment with views of the golf course.

Property experts are certain there will be Singaporean investors willing to take the first step, though the going may be slow initially. They cite the response to Iskandar as an example.

New property taxes for Australian Homes

Purchasing a property in sydney? Be prepared to pay a 4 per cent duty surchage. The rule was put in place on 21 June and will apply to all home purchases in New South Wales, making the state the second in the Country to impose stamp duties on foreign buyers. On top of that,there will also be a 0.75 percent land tax surcharge from next year on.

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New residential property in Hebei

Though the spotlight on some second and third-tier cities have dimmed, some bright sparks remain. Take the 533.3 ha Sino-Singapore Health City in Gaobeidian for example.

GaoBeidian1Photo credit: KSH Holdings

A Singapore-listed real estate and development company, KSH Holdings, has announced plans to launch a 3,050-unit residential project within the Hebei province by the end of 2016 together with their joint-venture partners, Beijing Jia Hua Hong Yuan Investment, Oxley Holdings, Lian Beng Group, Heeton Holdings and Zap Piling.

They continue to see potential for growth and demand for commercial and residential property development, especially as the infrastructure and shift in economics are favouring this particular township. With the high-speed train, Gaobeidian will only be a 20-min train ride away from Beijing. And with the food logistics centre moving to the city, the township is set to be an important hinterland.

GaoBeiDIanPhoto credit: KSH Holdings

The potential residential project launch will see up to 1,600 mass-market units priced between 4,000 to 5,000 yuan per sq m and 1,450 higher-end units priced between 7,000 to 8,000 yuan per sq m. And this is only a fifth of the 18,000 new homes the township will eventually yield in phase 1. The second phase will potentially yield up to 30,000 new residential units. The Gaobeidian development will also include a 40,000 sq m commercial site, a food-safety testing centre and even a mountain-climbing training centre.

Myanmar – Immense growth potential for property investments

While still battling a history of military rule, political censorship and restrictions, Myanmar has been gradually warming up to the rest of the world ever since its political reform in 2011 and the reception of foreign investment in 2012.

GOldenCity1

Photo credit: D3 Capital

Regional and global investors have been slowly exploring investment opportunities in the country and have found that it is a wealth of resources. Similar to China when the country first opened up, where folks had cash to spend but nowhere to spend them as it is not yet as developed as other Asian or Asean countries, the potential for growth is immense. Singaporean investors have also been seriously looking into the country for opportunities and properties have been sprouting rapidly.

D3 Capital, run by Daphne Teo, an ex-national swimmer who used to represent Singapore in her teens, has been developing mixed-used luxury project – Golden City – in Myanmar since 2014. Come 2018, the rare piece of land near the Inya LakeShwedagon Pagoda and University of Yangon, will see an amalgamation of some of the country’s tallest skyscrapers housing a hotel, serviced residences, plus offices and retail units. Consisting of ten 33-storey towers and a 6-storey block, it will also hold 100,000 sq ft of greenery and gardens and will be valued at approximately S$960 million.

CambodiaPropertyIf Cambodia and Vietnam, which have both had a head-start in the property investment market, are anything to go by, Myanmar will be a worthy contender for the fastest growing country in South-east Asia.

Banking on Shophouses

Who would have knew half a century back that the humble shophouse would be worth millions today. As their numbers decreased and rarity grew, so did their value. If a few millions would have gotten you baulking a few years back, the most recent $10.8 million, approximately $3,750 psf, for an Ann Siang road shophouse would have you out of your seats by now.

AmoyStreet ShophouseForeigners and wealth funds are increasingly looking into investment opportunities in these rare commodities, especially those in the central business district (CBD). Shophouses’ popularity amongst the rich and affluent have leapfrogged in the past couple of decades despite rental prices having stayed stagnant. As some of these wealth funds are under pressure to utilise capital and expand portfolios, foreign purchases of shophouses in District 1 and 2 have picked up over the past couple of years. 99-year leasehold shophouses are now going for close to $3,000 psf.

Though the commercial leasing market has been on the downhill slide, tenants are still more willing to fork out say $18,000 for a renovated shophouse unit as compared to the higher rents in Grade A offices or shopping malls. It comes as no surprise then, that 2 shophouses in Pagoda street wold for $24.2 million at around $2,800 psf; and another 6 units in Amoy street went for $20.25 million or $2,411 psf to a Chinese and a Spanish investor respectively. The continued interest in this market segment will continue well into the year and next, as prices have risen by 10% despite a fall in transaction volume last year.

 

China real estate’s real or false value?

The economic landscape in China has been nothing short of exciting lately, with quick-changing peaks and troughs. Following the recent stock market crash, investors are snapping up rapidly snapping up real estate, especially in Shenzhen and Shanghai. Investors are cashing out on their failing stocks and buying up real estate instead.

Shui On Land Wu HanPhoto credit: Shui On Land

The less-costly but equally major city of Shenzhen is leading the way for potentially similar activity in Shanghai, with property prices more than doubling in the last year. Properties are already considered expensive in the commercial and more cosmopolitan Shanghai, but even there, values are expected to rise 20 per cent. A new residential project in North-central Shanghai has recently launched to median prices of $1,600 psf, with a 1,800 sq ft unit  going for about $3.3 million. From the first-day sell-out response, saying that the buyers are biting is an understatement. Hong Kong developer Shui On Land is behind this project and will be launching the next phase in May this year, possibly at higher prices.

Taipingqiao1These actions however may be risky. A property bubble is growing and could burst if policies and economies are not managed efficiently. Some smaller counties are already struggling with increasing unsold inventory, with some townships reporting ‘ghost towns’ or developments which are severely undersold.