IN the last three years, Singapore has become a magnet for international property launches. It started with the UK developers making the city-state a key stop in their international marketing roadshows following the global financial crisis in early 2009. Developers from other cities have also converged on the city-state as the Singaporean appetite for overseas property seems insatiable.
The government's six rounds of residential property cooling measures and stubbornly high property prices in the local market may have increased the number of investors looking beyond Singapore. But the main draw of foreign shores is the historically low interest rates and strong Singapore dollar relative to other currencies such as the British pound and US dollar, says Julian Sedgwick, head of international residential sales at Savills Singapore.
With the exchange rate between the Singapore dollar and British pound hovering at 2:1, London property continues to attract Singapore buyers, especially the high-end developments in Prime Central London. Naturally, it's the favourite city among Singapore investors, says Sedgwick. There's growing interest for locations elsewhere in the UK, for example, in Edinburgh, Scotland, and the university town of Cambridge, says Sedgwick.
Besides major cities such as London, New York and Sydney, some projects from non-traditional overseas markets have also been well received in Singapore. For instance, Savills launched the Four Seasons Place in Pudong, China, in Singapore in early October, which saw strong interest. Located in the business district of Lujiazui in Pudong, the property, which is developed by Hong Kong-based Shui On Group, has views of the Hangpu River. Prices of the residences start from S$4 million (RM9.98 million).
Over the last few months, Savills has also launched a few residential projects from Bangalore, India, targeted at the non-resident Indians in Singapore, such as the Four Seasons Hotel Private Residences in Bangalore, and luxury condo RMZ The Latitude by Indian developer RMZ Corp. "We have had very good response in both launches, and some deals have been transacted," says Sedgwick, although he declines to disclose the actual figures. It was the maiden overseas launch for both the projects.
"We are always looking for new areas of investment that offer our clients the opportunity to divest their portfolios, in both traditional and new markets where there's potential for capital appreciation," says Sedgwick. Even though Singapore investors are very focused on key locations in gateway cities, "they could also consider looking at different markets, such as vacation or resort homes that present good investment opportunity", he advises.
For instance, a project from the Bahamas was launched in Singapore as part of its international roadshow in July by Knight Frank. A resort development called Baha Mar, it is located in the capital city of Nassau on New Providence, the most populous island in the Bahamas. The 300 seafront residences are freehold, with a mix of one- to three-bedroom units and prices starting from US$1.6 million (RM4.9 million). Buyers will automatically be granted Permanent Residence by the Bahamian government. Owners can choose to put their property back into the hotel rental pool, and enjoy up to 90 days at their own property every year. The attraction for most, according to Sedgwick, is that they can swap the 90-day stay for stays in up to 300 luxury hotels around the world, as hotel partners include Mandarin Oriental, Shangri-La, Fairmont, Raffles, Ritz Carlton, Mondrian, and Four Seasons. "There's also an opportunity for capital appreciation here," says Sedgwick.
Luxury resort properties that Savills is marketing include the Baha Mar, the Alila Villas in Bintan and Bali, as well as The Residences at St Regis Bangkok. He sees interest in Bangkok properties picking up among his clients in Singapore. "There are very few completed products in the luxury segment. While Bangkok had been hit by floods last year, politically it seems more stable and hence, interest has returned."
A city where developers have rarely considered launching residential projects overseas, but is doing so for the first time, is Tokyo. The maiden launch is The Parkhouse Shinjuku Tower by a consortium made up of renowned Japanese developer Mitsubishi Estate, its wholly owned subsidiary, Mitsubishi Jisho Residence Co Ltd, and Heiwa Real Estate Co Ltd, with CapitaLand participating as a limited liability partner. The residential tower is part of a mixed-use development called Shinjuku Front Square, and is located in the vibrant business, entertainment and shopping district of Shinjuku, within a 15-minute walk to the Shinjuku Station. The project is marketed by Jones Lang LaSalle in Singapore over the weekend of Nov 16 to 18. Prices are said to start from S$700,000 for a one-bedroom unit.
Sedgwick expects to see more international projects coming to Singapore next year. While interest in London property is expected to continue unabated, properties in Australia, primarily Sydney and Melbourne are also expected to see strong demand. Key US cities such as New York, San Francisco and Chicago also present opportunities. In Europe, luxury apartments in Paris and Milan are likely to attract Asian investors, he says.
Closer to home, a destination that has created a buzz in Singapore this year is Iskandar Malaysia. It was reported on Nov 8 that total investments in Iskandar Malaysia this year have totalled RM15 billion. To date, with investments from Singapore seeing the most significant increase. More residential projects from Iskandar Malaysia are expected to be launched next year, reckons Sedgwick, especially with more Singapore developers exploring deals there. The upcoming Thomson Line, which will link Singapore to Johor Baru in 2019, and the opening of new colleges and private schools such as Marlborough College, have also stirred interest, not just among expatriates but Singaporeans as well. "It's certainly an area to watch," says Sedgwick.
Cecilia Chow is City & Country editor at The Edge Singapore. This story first appeared in The Edge weekly edition of Nov 26-Dec 2, 2012.