<p><img alt="Hong Kong's obvious appeal has made it one of the hottest and highest-priced real estate markets on the planet" src="/documents/10204/0/cool-run-ins-lead-2-compressor.jpg/51af3b06-8f41-4aa7-a817-fd681f0e1520?t=1524115986650" style="width: 1439px; height: 677px;" />It would be fair to say that Singapore’s famously stringent cooling measures haven’t always made those inside the country’s real estate sector feel warm and fuzzy. </p> <p>But as the market in the Lion City displays signs of improving vitality while showing demonstrable value, fairness and sustainability – especially in comparison to regional rivals such as Hong Kong – there have been converts to the cooling measures cause. </p> <p>When the country’s government first started using a firmer hand to stabilise the market, property prices were escalating at a dramatic rate, rising by up to 60 percent between 2009 and 2013.</p> <p>The government’s application of icy water on the overheating market through measures such as raising the rates for Additional Buyer’s Stamp Duty (ABSD) was strong and decisive – and resulted in home prices dropping for a record 15th quarter in June 2017. </p> <p>Despite pressure from developers and others who accuse the government of presiding over a sector that shows only very timid signs of life, cooling measures are likely to be in place for some time to come. </p> <p>In March this year, the Singapore government reduced stamp duty imposed on sellers and some mortgage restrictions. That helped stoke optimism that the country’s property market is rebounding, with home sales jumping and developers showing more aggression at land auctions. </p> <p><a href="http://property-report.com/detail/-/blogs/inside-one-of-singapore-s-strangest-hom-8" target="_blank"><strong>More: Inside one of Singapore's strangest homes</strong></a></p> <p>Ravi Menon, managing director of the Monetary Authority of Singapore, however, quashed any notion that cooling measures were on their way out. “Mortgage rates are very low,” he says at the release of the bank’s annual report in June. “And the risk of a renewed unsustainable surge in property prices is not trivial.”</p> <p>Indeed, few would argue that the government has not achieved what it set out to when it stepped in to apply some correction to the market.</p> <p>“Despite the rolling out of tax-based and other restrictive policies by various governments in other countries to cool their housing markets, Singapore seems to be the only major market where prices are effectively contained,” says Christine Li, director and head of research at Cushman & Wakefield Singapore.</p> <p>“As of 2016, Singapore’s housing price to income ratio of 4.8 is the lowest among the global “superstar” cities such as New York, London and Hong Kong – the latter has a ratio of 18.1 – thus making Singapore an attractive market in terms of value.”</p> <p>“The cooling measures have been very successful,” adds Alex Shlaen, managing director at Panache Management, a luxury brands and investment advisor. “Probably even over-successful. The government dealt with a shortage of supply by adding significantly to the HDB (Housing Development Board) government-subsidised public housing. It was the luxury market which was the main target and the main victim. But the prices of luxury properties are now among the lowest in the world relative to similar top locations.”</p> <p><img alt="The Singapore government's attempts to cool the country's property sector are widely viewed as being successful" src="/documents/10204/0/cool-run-ins-singapore-compressor.jpg/bccc90f0-8edf-4118-85ac-93e073b2f90e?t=1524115427281" /></p> <p>Yet while even the strongest critics of Singapore’s cooling measures at least acknowledge their efficacy, it’s a hugely different story in Hong Kong where attempts to restore sanity to an overheated market have largely failed. In the view of many experts, in fact, the demand suppression measures enacted by the Hong Kong Monetary Authority have only succeeded in making matters more problematic.</p> <p>“They have failed to rein in property prices,” says Denis Ma, head of research for JLL Hong Kong. “And, in our opinion have made the situation worse by shutting down the secondary market.”</p> <p>Housing prices in Hong Kong have increased by as much as 80 percent since the government started introducing cooling measures in late 2009. These include an array of stamp duty levies and reduced borrowing capacity in the form of lower LTV ratios and stress-tests of debt-servicing ratios. </p> <div class="pull-quotes-container">While even the strongest critics of Singapore’s cooling measures at least acknowledge their efficacy, it’s a hugely different story in Hong Kong</div> <p>However, these measures have disproportionately affected buyers in the secondary market, notes Christopher Dillon, author of the real estate guide Landed Hong Kong.</p> <p>"Developers now offer financing packages that are outside the Hong Kong Monetary Authority's regulations,” he says. “These packages make new homes far more attractive than pre-owned ones. That's crushed volumes in the secondary market.”</p> <p>“Housing prices and volumes use to correlate well,” agrees Ma. “However, since the government introduced these measures, this relationship has been distorted; volumes down but prices up! </p> <p>“The biggest problems with the government’s measures is clearly that they’ve been ineffective and have locked out a lot of people from getting on the housing ladder. And for a lot of these people, it’s not necessarily that they don’t have the ability to service a mortgage. Rather it’s the significant increase in upfront transaction costs that sends them to the sidelines.”</p> <p>Hong Kong’s cooling measures have also missed a key target. “Tighter mortgage regulations have little effect on cash buyers,” observes Dillon.</p> <p>Cooling measures, by their very nature, are not intended to excite. They are specifically designed as a way of placing barriers in front of speculators and developers: hardly a sexy recipe. Nevertheless, if applied correctly and consistently, they can provide a necessary pressure valve. In Singapore, this valve seems to be having its intended impact. In Hong Kong, the apparatus appears too flimsy to handle the heat.</p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/255811" target="_blank">Issue No. 145 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="" src="/documents/10204/0/vietbeach.jpg/7964e1f6-99db-428c-8360-7abcd80a2330?t=1523508628636" style="width: 1440px; height: 665px;" /></p> <p>From Myanmar to Vietnam, Southeast Asia’s emerging markets are increasingly opening to foreign investment. Brisk economic growth, improving infrastructure and quality of life are all contributing to growing interest from property buyers looking for a relative bargain.</p> <p>An abundance of new flights to China and thriving tourism sectors have opened up destinations such as Cambodia’s coastal city <a href="http://property-report.com/detail/-/blogs/6-award-winning-beachfront-properties-in-southeast-a-21">Sihanoukville</a> and Danang in central Vietnam, both of whose property industries are thriving.</p> <p>Yet the lure of being at the forefront of the next property craze is not without risk. Red tape, corruption and onerous regulations continue to represent significant hurdles to smooth investment.</p> <p>In Vietnam, there has been a marked shift in the supply of mid and high end residential property. In the first nine months of 2017, the mid-end residential segment grew to occupy 40 percent of total supply from about 30 percent in 2012, according to Dung Duong, CBRE’s country head of research and consulting services.</p> <p>Conversely, since 2015 there has been a slowdown in high-end properties launched after an intense few years that saw a flurry of premium units hit the market.</p> <p>“Entering 2017, developers have been very cautious and have tended to delay launching high-end products, focusing instead on mid-range properties,” says Duong. “We see there are more and more [purchases] from end users rather than investors.”</p> <p>While Ho Chi Minh City and Hanoi are still Vietnam’s most attractive and active property markets, buyers are being drawn to the coastal destinations of Da Nang, Nha Trang and Phu Quoc where the government is on a drive to boost investment and tourism.</p> <p>Danang has grown significantly this year, says Duong, where a string of new condominium and villa launches has fed into “impressive” growth and a robust tourism industry that saw 1.7 million visits in the first nine months this year, up 49 percent on the prior year period.</p> <p><a href="http://property-report.com/detail/-/blogs/why-southeast-asia-is-still-prime-quarry-for-chinese-investors"><strong>More: Southeast Asia is still a prime target for Chinese investors </strong></a></p> <p>Likewise, in Cambodia, the property market in Sihanoukville, the southwestern coastal province, has exploded in the last couple of years as Chinese investors pump money into hotels and casinos.</p> <p>“Land prices within Sihanoukville have rapidly appreciated during the past 12 months… and in recent years, accumulated investment value has reached USD310 million,” according to mid-year review of the province by CBRE Cambodia.</p> <p>Although the Sihanoukville condominium market may still be in its infancy – the first high-rise project was launched there in 2015 – two residential-led projects comprising a total of 1,324 condominium units were announced and both are set to commence construction before the end of 2017. </p> <p>But as Sihanoukville heats up, Phnom Penh’s real estate market is cooling down.</p> <p>The capital’s condominiums have been rising at a remarkable pace in the last few years, etching new shapes in the skyline almost weekly and drawing warnings that the market was overheating – which seem to be now ringing true.</p> <p>“There is an oversupply in the high-end segment of the market, which most Cambodians just simply cannot afford – thus it has been mainly foreign investors buying. Obviously there is a finite number of foreign investors and hence sales have slowed significantly over the last year,” says Ross Wheble, Knight Frank country director for Cambodia.</p> <p>“To be sustainable, the market needs to be driven by domestic demand and developers have now shifted to more affordable projects,” he adds. “We have seen increasing interest from Cambodians for units priced below USD50,000.”</p> <p><img alt="Once a predominantly low-rise city, Phnom Penh is now studded with ambitious skyscrapers" src="/documents/10204/0/phnom+penhytdydt.jpg/9e0e75f1-acda-4462-af25-e62f9f416fec?t=1523507830358" /></p> <p>In Myanmar, where investment poured into Yangon after the country opened and the prices of land and apartments rocketed, the government’s adjusting of the market has made the situation less worrisome, Serge Pun, executive chairman of multinational real estate firm SPA Group, told local media early this year.</p> <p>The country’s 2,000-odd kilometre stretch of coastline, remote and untouched by developers, offers huge potential for tourism and business – if people can get there. Currently, flights and transport to areas such as Dawei, which boasts more than 20 spectacular beaches, is limited. </p> <p>Naturally, developers have a keen interest in land along the almost untouched coast but the area’s ports, roads, power supply and other infrastructure need to be upgraded first.</p> <p>“People are eyeing up the islands in the archipelago,” Hugo Slade, managing director of Slade Property Services, says. “The coastline here is one of Myanmar’s most prized assets, not just for resort development but for the potential in shipping [to China, India, and Bangladesh].”</p> <p>Still, nobody expects Dawei and its coastal counterparts to become an overnight Phuket – or at all for that matter.</p> <p>“Myanmar is such a conservative place,” Slade adds. “So, with any development we don’t believe we will witness the same tourist traits you see in the rest of Southeast Asia.”</p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/255811" target="_blank">Issue No. 145 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="" src="/documents/10204/0/Precious-China-lead-2-compressor.jpg/2e22a5e6-c9a5-4c1a-9848-0f98d3e07499?t=1522906993622" style="width: 1439px; height: 661px;" />The flag-waving Chinese tour guides that flood Bangkok’s Suvarnabhumi and Don Mueang airports typically follow a tightly marshalled route around Thailand. </p> <p>Nearly all are herded onto buses and out of the capital to Hua Hin or Pattaya, just a few hours away. Many then catch a flight to Chiang Mai or Phuket. Some 9.5 million Chinese were expected to visit Thailand in 2017, according to the Ministry of Tourism – a staggering increase on the less than three million than visited only five years ago. </p> <p>“Much of the sales in Thailand are riding on the back of tourism,” says Cobby Leathers, head of international business at Sansiri, a leading Thai developer, which opened three new China offices this year. “One thing that stands out with our Chinese buyers is that we see them purchasing across all of our key local markets, namely Chiang Mai, Bangkok, Hua Hin, Pattaya and Phuket.”</p> <p>Although Chinese property portal Juwai.com reported that growth in Chinese inquiries across all markets slowed this year after Beijing began strictly enforcing controls on cash flows out of the country, Southeast Asia – and particularly Thailand and Vietnam – are still prime quarry for investors from the Middle Kingdom.</p> <p>Thailand jumped three places to third on the list of top destinations for Chinese buyers in the second quarter – only the US and Australia rank higher – while Vietnam has made a surprising leap in popularity as a property investment destination among mainlanders. </p> <p>Enquiries for Vietnam by Chinese grew a staggering 442 percent between January and May in 2017, Juwai.com data shows. Although geographically close, Vietnam was the subject of a flurry of negative headlines in China the year before after anti-Chinese riots over a territorial dispute in the South China Sea left more than 20 people dead and over 100 injured. </p> <p><a href="http://property-report.com/detail/-/blogs/what-you-need-to-know-about-asia-s-final-frontie-4" target="_blank"><strong>More: What you need to know about Asia’s final frontiers</strong></a></p> <p>Although many Chinese cancelled their holidays to Vietnam in the immediate aftermath, three years on and the negative sentiment appears to have somewhat subsided, according to Juwai.com’s CEO Carrie Law.</p> <p>“There is always some impact, because angry headlines tend to make some buyers cautious. However, buyer demand has nonetheless continued to grow strongly,” she says. “Vietnam has catapulted from the thirty-third most popular country for Chinese international property buyers to the tenth over the past two years.”</p> <div class="pull-quotes-container">Aside from Thailand, only Malaysia ranks higher than Vietnam in terms of Chinese interest</div> <p>Newly relaxed property laws have proven a major market incentive. In 2015, the central government passed a law that means anyone with a valid visa can now buy property with a lease of up to 50 years. Previously, foreign buyers were required to hold a work visa and had to have already lived in the country for one year. </p> <p>Aside from Thailand, only Malaysia ranks higher than Vietnam in terms of Chinese interest, but it’s been a mixed year for property sales on the Malay Peninsula. </p> <p>Although analysts report robust Chinese demand, particularly in Kuala Lumpur, the huge Chinese developments in Johor at Iskandar facing Singapore – dubbed the ‘next Shenzhen’ – have reportedly faced sluggish demand as buyers have struggled to get their yuan out of the country amid tighter controls by Beijing. </p> <p>Forest City by Country Garden – the biggest of them all with 700,000 new inhabitants targeted by 2050 – has faced the bulk of negative headlines as many Chinese buyers desperately try to recoup their deposits after struggling and failing to make payment instalments.</p> <p><img alt="Areas such as Johor in Malaysia have gone the extra mile to attract Chinese investment by easing the way for joint venture developments" src="/documents/10204/0/Precious-China-2-compressor.jpg/61d2427d-fa53-434e-b1dd-09c1cd04ddb4?t=1522907048624" /></p> <p>Country Garden has advertised the project based on the key selling point that it lies just a few kilometres from Singapore, a market which retains appeal for Chinese due to its wealth, stability and Mandarin-speaking population. </p> <p>“I think it is important to note that Forest City represents a long-term vision for the region with an expected build-out of 20 to 30 years,” said Michael Grove, director of the Shanghai office of Sasaki which designed the project, which includes four man-made islands.</p> <p>Singapore, despite its tiny size, itself ranks as the fourth-most popular investment destination in Southeast Asia among Chinese buyers. After that, the archipelago nations of Indonesia and the Philippines come in as the next most popular among Chinese buyers, and then emerging markets Cambodia and Laos.</p> <p>Chinese have traditionally been heavy investors in Cambodia’s main export industry – garments – building and running dozens of factories on the outskirts of Phnom Penh, but until recently housing development was dominated by South Korean firms, not Chinese. That’s changing quickly, says Ross Wheble, director of Knight Frank’s Phnom Penh office.</p> <p>“It’s only over the last 18 months or so that we’ve seen an increasing number of Chinese developers entering the market and thus there has been an increase in the number of Chinese investors buying condominiums,” he adds.</p> <p>While Chinese visitors may not flock other regional airports in quite the same way they do in Thailand, there’s little doubt that the country’s investors remain intent on planting their flags in property markets around Southeast Asia. </p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/255811" target="_blank">Issue No. 145 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="" src="/documents/10204/0/Dubai+investment+lead.jpg/aafa71e2-436a-4ff5-8132-5b38abfe8e97?t=1522240644948" style="width: 1439px; height: 621px;" />Of all the phrases that were aired with the most conviction at Cityscape 2017, the UAE’s annual real estate and infrastructure showcase that took place over five days in late September, “hitting bottom” must have achieved something close to top billing. </p> <p id="yui_patched_v3_11_0_1_1522838893232_976">Whether uttered as much in hope as expectation, it was everywhere: in speeches, breakout sessions, sales pitches and lunch-break conversations, as though sentiment alone might be sufficient to drag the city’s property market out of what has been a sluggish period. </p> <p id="yui_patched_v3_11_0_1_1522838893232_817">If Cityscape itself is any barometer, though, there are certainly signs that a 36-month period in which values have declined 14 percent on average – and up to 30 percent in the luxury sector – might be nearing a conclusion. </p> <p>The Dubai Land Department reported that off-plan sales at last year’s event, which attracted an impressive 45,500 participants, totalled more than USD236 million, with more sales expected in the subsequent weeks. </p> <p>Most of the headlines focused on the anonymous buyer of a penthouse in Omniyat’s luxury One Palm development for USD27.8 million. But perhaps more indicative of a general upswing was the announcement from Azizi Developments that it had sold out phase one of its USD3.25 billion waterfront project in Dubai. </p> <p>Aldar Properties, whose return to show after a five-year absence was a positive by itself, sold out the first phase of its new Water’s Edge project on Abu Dhabi’s Yas Island, which equates to USD109 million-worth of sales. </p> <p>“We saw a dramatic leap in the number of registered Land Department transactions made for off-plan units,” Lynnette Abad, partner and head of Property Monitor, a UAE-based real estate portal, says. “Permission to sell during the show has acted as a catalyst for investors in the region, and has resulted in a noticeable increase of activity.”</p> <p>The last point is certainly one to take on board. Event-specific deals and innovative packages such as Al Mazaya Holding offering the keys to properties in its Q-Line development in Dubailand with just 20 percent down and a five-year post-handover payment plan does suggest it remains a buyer’s market. </p> <div class="pull-quotes-container">Many investors have identified Expo 2020 as the key for driving the market forward</div> <p id="yui_patched_v3_11_0_1_1522838893232_850">Yet with a raft of new projects and masterplans revealed at the show there was an undeniably more positive mood at last year’s event. Big reveals included the USD2.2 billion, 15,000-unit rejuvenation of Dubai Motor City, a joint venture by Union Properties and the China State Construction Engineering Corporation (CSCEC). There was also Klieindhorst Group’s announcement of a “Floating Venice”, a USD680 million island that aims to recreate St Mark’s Square off the coast of Dubai. </p> <p>According to Cityscape Global’s exhibition director Tom Rhodes two factors are responsible for the renewed sense of optimism. “Many investors have identified Expo 2020 as the key for driving the market forward,” he says. “Over the past year, more than 1,200 contracts have been awarded for the Expo 2020 with 47 construction contracts worth AED11 billion (USD3 billion) awarded in January alone. </p> <p id="yui_patched_v3_11_0_1_1522838893232_878">“We have also seen the impact that Brexit has had on the regional real estate market. Such is the turbulent geopolitical climate in Europe, the UAE could be viewed as an increasingly attractive market for a safe investment from foreign markets.”</p> <p id="yui_patched_v3_11_0_1_1522838893232_880"><a href="http://property-report.com/detail/-/blogs/buyer-blues-in-indone-23" target="_blank"><strong>More: Buyer blues in Indonesia</strong></a></p> <p>The better news is starting to be reflected in the wider real estate sector. While Faisal Darrani, head of research at property consultants Clutton’s, prefers the word “stabilise” to the phrase “hitting bottom”, he is keen to underline that Dubai is only half-way through its second full property cycle. </p> <p id="yui_patched_v3_11_0_1_1522838893232_904">Aside from headline-grabbing figures and announcements at property shows, he paints a more complex picture based on a combination of affordability, location and the value a developer can create in a project.</p> <p>“We’ve experienced three years of price declines in residential capital values and since the last market peak in Q3 2008, values are 30 percent down,” Darrani says. “But those figures mask a much more complex picture. The luxury end of the market is still correcting and units in Burj Khalifa [the world’s tallest building], are as much as 70 percent down from that peak, and villas on The Palm [Jumeirah: a massive manmade archipelago off the Dubai coast] are 33 percent down. </p> <p>“Yet certain locations haven’t moved at all. Anything that is priced under AED800-1,000 per square foot transacts well. And that’s where we’re seeing values hold.”</p> <p><img alt="Unashamedly flashy, the United Arab Emirates offers numerous lifestyle benefits as well as real estate supply that play towards buyers' ideas of how luxury living should be realised" src="/documents/10204/0/2-compressor.jpg/978602b4-8bd1-48a4-b31a-a52d1b2a4f5a?t=1522241086000" style="width: 740px; height: 493px;" /></p> <p id="yui_patched_v3_11_0_1_1522838893232_389">Indeed, stability does seem to be entering the very top-end, too, at least in the secondary market. High-end property brokerage<a href="https://www.luxhabitat.ae/"> Luxhabitat </a>has reported that the average price per square foot in the prime segment – which it identifies as units in 12 districts including Al Barari, Downtown Dubai, Dubai Marina, Emirates Hills, Jumeirah, Jumeirah Beach Residences, The Palm Jumeirah and The Lakes – remained at around the USD392 per square foot mark, with a total volume of transactions at USD520 million.</p> <p>As Cityscape underlined, though, it’s the off-plan sector that is bucking most of the trends. In Q1 2017, for instance, leading developer Emaar sold USD1.65 billion worth of property in Dubai, a 44 percent year-on-year increase, while Damac, another property titan, reported a 29 percent rise in off-plan sales between Q4 2016 and Q1 2017. In the depressed market of 2015-2016, analysts Reidin claim that off-plan sales accounted for half of all activity. </p> <p>The economic picture explains most of this data. Dubai has endured a challenging three years, impacted by a fall in the price of oil (on which many companies based in the city rely, even if the city itself no longer does), a rising dollar (against which the Emirati dirham is pegged), and declining GDP, all of which have resulted in large redundancy programmes in the finance, banking, energy and aviation sectors. </p> <p>And although growth predictions for 2017 have been trimmed from 2.5 to 1.5 percent, the International Monetary Fund has indicated the UAE’s economy will grow by 2.5 percent in 2018, driven by rebound in investment, manufacturing and trade. Then there’s Expo 2020, which has already resulted in USD3 billion in infrastructure spending which in turn will create more than 300,000 jobs over the next three years. </p> <p>Adding to all this mix comes an influx of buyers from Asia, and particularly China. Since 2013, Chinese buyers have poured USD2.72 billion into Dubai’s real estate market, while Chinese real estate website juwai.com reports an 80 percent increase in enquiries for UAE properties between 2015 and 2016.</p> <div class="pull-quotes-container">Brexit will only enhance the UAE’s prominence within the Middle East as the premier destination</div> <p>According to Bernie Morris, president of the UK, Europe and the Middle East for juwai.com, there is both a push and a pull factor for this upsurge in interest: Brexit reducing the appeal of long-favoured London and the range of opportunities in Dubai itself. </p> <p>“[Brexit] will only enhance the UAE’s prominence within the Middle East as the premier destination,” he says. “With its high-quality new residential construction, the UAE has the perfect product for those Chinese investors who prefer to invest in off-plan or new build property.”</p> <p>Indeed, the prices in Dubai’s prime locations, which hover around USD400 per square foot, certainly look like a better deal than Hong Kong (USD3,000 psf), Singapore (USD1,200) or London (USD2,000).</p> <p><a href="http://property-report.com/detail/-/blogs/what-you-need-to-know-about-asia-s-final-frontie-4" target="_blank"><strong>More: What you need to know about Asia’s final frontiers</strong></a></p> <p>There are other reasons, too. China is the UAE’s second largest trading partner, and there have been numerous high-level joint investments as part of Beijing’s “One Belt, One Road” economic initiative launched in 2013. </p> <p>There is now, for instance, the USD10 billion UAE-China Joint Investment Fund managed by Mubadala Capital, while China’s Cosco Shipping Ports is in the process of launching a dedicated container terminal at Khalifa Port in Abu Dhabi.</p> <p>For those looking to enter this market, there is not only a dizzying array of new properties in the pipeline, but also entire new districts set for completion in the next five years. </p> <p><img alt="With grand land reclamation projects like Palm Jumeirah providing room to manoeuvre, there's no chance that Dubai will have any shortage of space for development anytime soon" src="/documents/10204/0/dubai+investment+3.jpg/b19ccd0b-464b-4768-b4ba-e6bc8714d280?t=1522241178400" style="width: 739px; height: 445px;" /></p> <p>Among the most intriguing are Emaar’s Dubai Hills Estate, part of the Mohammed Bin Rashid City project, which comprises villas, townhouses and residential towers, that will, when completed, offer 24,000 homes – and prices are already hovering around USD320 per square foot for the villas, which are set for completion in 2019.<br /> .<br /> Dubai Creek Harbour, also by Emaar, is located on a six-square-kilometre area of land behind the Ras Al Khor Wetland Reserve and will be home to the largest skyscraper in the world and a huge plethora of residential towers and villas. </p> <p>“These premises with views of the new tower are going for USD435 to USD490 per square foot,” says Clutton’s Darrani. “It’s a good example of how developers in Dubai are creating value now, by building billion-dollar monuments, essentially, and more waterfront properties.”</p> <p>Importantly, though, with the population of Dubai expected to climb to nearly five million by 2030, the construction in this phase is more about meeting need than creating it. </p> <p>The pre-crash philosophy of “build it and they will come” has been replaced by a more measured, albeit less quotable philosophy: build it where there’s a need at prices that make sense for as wide a customer base as possible. </p> <p>The ongoing equalisation between supply and demand, in combination with a more promising economic outlook, ought to provide the stability the international investor needs.</p> <h3>Potential flashpoints</h3> <p>Although the overall economic outlook for Dubai looks more positive, there are two key factors that could affect real estate prices in the short-term, says Darrani of Clutton’s:</p> <p><em>On oil price</em></p> <p>“Although it contributes less than 4-5 percent of the country’s GDP, the UAE is home to many jobs that depend on oil, whether directly in the oil and gas sector, to allied industries such as logistics and finance. We’ve seen this impact the job market, especially at the key manager and C-level.”</p> <p><em>On the Qatari diplomatic crisis</em></p> <p>“The UAE’s Gulf neighbour has traditionally been among the top three regional investors into the Dubai real estate market, piling into luxury developments. But that market is now cut off from them. Should the diplomatic tensions persist, it might damage the reputation of the Gulf as a political safe haven – which, of course, has set it apart from the rest of the region.”</p> <h3>Crypto thinking</h3> <p>Considering the recent clampdown on cryptocurrency exchanges in China, perhaps Bitcoin devotees in Asia might be tempted to spend them on The Aston Plaza & Residences. </p> <p>The twin-towered development in Dubai Science Park from British entrepreneur Baroness Michelle Mone is the first in the city to accept Bitcoin as a payment – which coincides with the Dubai Land Registry using blockchain technology to record all local real estate contracts.</p> <p>“Dubai is an exciting place to be if you are interested in blockchain technology and cryptocurrency,” says Mone’s partner Doug Barrowman. “Aston Plaza apartments will be the first property purchase that is 100 percent end-to-end on the blockchain. The transaction starts with a blockchain-based cryptocurrency payment, it finishes with a record of the property purchase on a blockchain-based land-registry ledger.”</p> <p>Prices for the apartments currently start at 32 Bitcoin, although one might expect that to change a few times before a contract is signed.</p> <h3>Dubai's most exciting projects</h3> <h4>One Palm</h4> <p><img alt="" src="/documents/10204/0/ONE+AT+PALM+JUMEIRAH+3.2.jpg/d8ba2782-526a-4125-9f59-79a7519aa8c5?t=1522244186097" style="width: 740px; height: 276px;" /></p> <div>Developer: Omniyat</div> <div>Unit size: 4,331-29,800 sq ft (402-2,770 sqm)</div> <div>Number of units: 90</div> <div>Price: AED14.8-102 million (USD4-27.7 million)</div> <div>Location: Palm Jumeirah</div> <div>Completion date: 2018</div> <div>X-factor: private jetties for yachts, exquisite views of the Dubai skyline</div> <div> </div> <h4>The Aston Plaza & Residences</h4> <p><img alt="" src="/documents/10204/0/ASTON-2-compressor.jpg/e403a304-0196-4a6a-bb1a-126b048568c8?t=1522244219354" style="width: 740px; height: 415px;" /></p> <div>Developer: Aston Developments Ltd</div> <div>Unit size: From 493 sq ft (46 sqm)</div> <div>Number of units: 1,133</div> <div>Price: From 33 bitcoins (USD203,000)</div> <div>Location: Dubai Science Park</div> <div>Completion date: 2019</div> <div>X-factor: first major residential development to accept payment in cryptocurrency</div> <div> </div> <h4>Dubai Hills Estate</h4> <p><img alt="" src="/documents/10204/0/DUBAI-HILLS-ESTATE-3-compressor+%281%29.jpg/f45c9cf1-0087-4ac2-8aad-7fc41538802e?t=1522244247527" style="width: 740px; height: 417px;" /></p> <div>Developer: Emaar, Meraas Holding</div> <div>Unit size: 605-3535 sq ft (56-328 sqm)</div> <div>Number of units: 24,000</div> <div>Price (avg): USD320 per sq ft (villas)</div> <div>Location: Mohammed Bin Rashid (MBR) City</div> <div>Completion date: 2019</div> <div>X-factor: 18-hole championship golf course, high-end retail centres</div> <div> </div> <h4>Oia Residences</h4> <p><img alt="" src="/documents/10204/0/OIA-RESIDENCE-2-compressor.jpg/481c77d9-b3d1-430d-993b-ad4fbdb2ed53?t=1522244271474" style="width: 740px; height: 444px;" /></p> <div>Developer: Union Properties</div> <div>Unit size: 810-2,930 sq ft (75-272 sqm)</div> <div>Number of units: 269</div> <div>Total development value: AED450 million (USD122 million) </div> <div>Location: Dubai Motor City </div> <div>Completion date: 2018</div> <div>X-factor: contemporary Greek-inspired design, proximity to Dubai Autodrome</div> <div> </div> <h4>Creek Rise</h4> <p><img alt="" src="/documents/10204/0/CREEK-RISE-2-compressor.jpg/958625a3-19c6-47cf-99fd-4426ce5b2a5c?t=1522244295440" style="width: 740px; height: 535px;" /></p> <div>Developer: Emaar</div> <div>Unit size: From 831 sq ft (77 sqm)<span style="white-space:pre"> </span> </div> <div>Number of units: 524</div> <div>Price: From AED957,888 (USD261,000) SD490 per square foot,”</div> <div>Location: Dubai Creek Harbour</div> <div>Completion date: 2021</div> <div>X-factor: The Tower, a 928-metre-high structure with rotating observation deck</div> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/255811" target="_blank">Issue No. 145 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="" src="/documents/10204/0/science-friction-songdo-lead-compressor.jpg/d5a79166-f1c5-4786-b5e0-479dc65e2eb0?t=1520760636520" style="width: 1435px; height: 697px;" />This was supposed to be the future. Songdo, an instant city built on 600 hectares of reclaimed land along the Incheon waterfront near the South Korean capital Seoul, has ridden wave after wave of eco- and techno-utopian hype that started before its first brick was laid.<br /> <br /> It was initially meant to be an “aerotropolis”, a futuristic international business hub tied to Incheon International Airport that would allow global access to one-third of the world’s population with 3.5 hours – a sort of purpose-built Hong Kong or Singapore to lure Western multinationals to set up shop.<br /> <br /> It has also been billed as the world’s first smart city with the latest in connected technology to create an environment that is safer, greener, more convenient and more efficient.<br /> <br /> But the reasons for its grandiose billing aren’t overly evident upon visiting. Songdo is exceedingly, well, nice. It’s pleasant. It’s clean. Not the deserted techno-dystopian misfit it’s been made out to be by some critics, but neither is it a city that seems plucked from the wildest realms of sci-fi.<br /> <br /> Kids are getting out of school buses. Young mothers are pushing strollers and people are walking dogs along luxuriously wide pavements. Cyclists are utilising Songdo’s 25 kilometres of bike lanes and joggers move purposefully through Central Park, the 41-hectare centrepiece of the downtown Songdo International Business District (IBD).<br /> <br /> Yet there is more going on than meets the eye. The brains of the city can be found in its massive networks of connected sensors that monitor everything from traffic accidents to pollution levels along with a Big Brother-like video surveillance system anchored in the U-Life Centre where a wall of screens streams real-time footage. Inside every home in the IBD, meanwhile, an automation system on a digital control panel allows residents to monitor their energy use. </p> <p><img alt="Songdo was heralded as the world's first smart city" src="/documents/10204/0/science-friction-2-compressor.jpg/6d49adae-6dad-48a8-b6c3-999496519138?t=1520569757337" /><br /> </p> <p>Songdo was conceived in 2001 as a public-private partnership between New York-based Gale International, Korea-based POSCO E&C and Incheon Metropolitan City. Construction began in 2005, and it is now in a third phase of development. Some 45,000 people call the well-designed high-rise buildings of IBD home, while the greater metropolitan area has grown to more than about 130,000 residents. <br /> <br /> The city even has its landmarks, including Incheon Bridge, Korea’s longest at 21 kilometres, which connects Songdo directly to the airport, and the 68-story Northeast Trade Tower, the second highest building in Korea.<br /> <br /> And yet Songdo appears to have had many more misses than hits on the tech front, as it has cycled through numerous technology partners from LG to Microsoft, leaving behind a scrap heap of failed ideas. Cisco Systems, which provides much of the city’s networking infrastructure, was hoping to make it the showpiece for a consumer-facing version of its TelePresence video-conferencing system, envisioning a screen in every home that would connect residents to each other and a world of interactive learning and content. But that too didn’t move beyond an extremely limited implementation.</p> <p><a href="http://www.property-report.com/detail/-/blogs/the-world-s-first-truly-smart-city-must-take-flight-with-its-peop-1" target="_blank"><strong>More: The world’s first truly smart city must take flight with its people</strong></a><br /> <br /> Part of the problem, says Greg Lindsay, a senior fellow of the New Cities Foundation, an international non-profit organisation focused on urban planning solutions and policies, comes from an overly top-down approach.<br /> <br /> “These are corporations that are driving whatever vision they have at that moment,” said Lindsay. “It's singular, it's not broad enough, it's not based enough in what people actually want. If you want to harness the capabilities of a smart city, you need a lot of bottom-up uptake and you need people to be able to design their own uses for things.”</p> <p> </p> <div class="pull-quotes-container">That's the biggest problem with the whole smart cities paradigm: you can't align the cycle of the slow rate of change of urbanism with the hyper-accelerated rate of change in tech</div> <br /> <br /> The problems of designing a smart city also are apparent in two very mismatched timeframes – while implementing things on a city-wide scale is a long-term process, technology is infinitely more nimble and fast-moving. For example, Cisco’s planned TelePresence rollout in Songdo was scuppered by the emergence of the smartphone – an innovation that instantly rendered TelePresence obsolete. <p>“That's the biggest problem with the whole smart cities paradigm,” adds Lindsay. “You can't align the cycle of the slow rate of change of urbanism with the hyper-accelerated rate of change in tech and so you end up getting misalignment constantly.”</p> <p>Indeed, Songdo is far from the only smart city in the world to have experienced serious growing pains. Brasilia, the capital of Brazil, and Naypyidaw in Myanmar are among other “instant cities” criticised for their impersonality and overly planned feel. </p> <p>Other ambitious plans are also facing strong pushback from housing and land rights groups. India’s Smart Cities mission, a plan to create 100 smart Indian cities by 2020, has faced intense criticism for focusing on flagship developments while failing to address basics such as provision of electricity and sanitation in poorer urban areas.</p> <p>Another issue surrounding smart cities is what is being done with all the data collected. Concerns about privacy and surveillance remain a major concern, with visions of panopticons and predictive policing stoking 1984-style fears.</p> <p>While there’s little doubt that big data, the Internet of Things and sensor technologies will continue to reshape the future of cities, many of the most successful implementations to date seem to be coming from an incremental and more human-scale approach.</p> <p>If Songdo was Smart City 1.0, newer iterations seem to be learning and adapting from its hits and misses. The idea of greater data sharing and open APIs in a smart city environment is gaining traction – Australia’s Digital Transformation Office, for instance, positions itself as a “platform” for innovation, “to support flexible design of systems and, in many cases, public access and re-use,” according to its mission statement.</p> <p>Many of the most successful smart city implementations have managed to find the right balance of innovation and practical application. Barcelona, for example, is widely lauded for its use of IoT to enhance everyday life from parking to traffic to energy efficiency in city lighting systems. At the same time, the city has used its focus on smart-city projects to foster its local technology industry. The city’s 22@Barcelona district sees startups putting public data to use in new applications and developing IoT technologies.</p> <p><img alt="While most of the 45,000 people who call Songdo's international business district home are satisfied by their lifestyles, critics of the Korean smart city say it has failed to hit expected heights of technological advancement" src="/documents/10204/0/science-friction-3-compressor.jpg/196851af-5aac-400b-9dc2-d251ad98272e?t=1520569845397" style="width: 740px; height: 555px;" /><br /> </p> <p>Back in Korea, few would argue that Songdo has been an overwhelming success. Nevertheless, residents are quick to point out the merits of the place. “I live here because of the beautiful park, and because it’s close to the sea,” says Kim Seung-ho, a designer who works in Seoul, which is 56 kilometres away.<br /> <br /> Such testimony acts as a counterpoint to critics such as Chungha Cha, chairman and founder of the Seoul-based Re-Imagining Cities Foundation, who says: “I never considered Songdo to be a smart city or an eco-city. I think it’s a little bit of a marketing thing. As such, I don’t know why it’s getting so much publicity.” </p> <p>But, if it’s not the futuristic sci-fi eco-efficient ideal that it was billed as, Songdo can still point to some pretty impressive stats on its achievements thus far.</p> <p><a href="http://www.property-report.com/detail/-/blogs/5-minutes-with-a-barcelona-smart-city-expe-7" target="_blank"><strong>More: 5 minutes with a Barcelona smart city expert</strong></a></p> <p>One of its key features is a pneumatic waste disposal system with 55 kilometres of tubes that route trash to several collection points for recycling. The city also has more than 22 million square feet of LEED-certified space in 118 buildings, and was designed with 40 percent green space. Citywide water recycling is projected to reach 40 percent and waste recycling 76 percent by the year 2020.<br /> <br /> Developers claim that overall energy use in Songdo IBD is up to 40 percent less per person than an average city thanks to smart technology and use of insulation and high-performance glass.<br /> <br /> While it started with grand visions, Korea’s supposed smart city showpiece has emerged as something perhaps more modest than initially planned. The city of international globetrotters has instead become a quiet, well-designed community of families and young professionals.<br /> <br /> Whether you see that as a failure, a surprising success or something in-between depends on how you chose to look at it.<br /> <br /> “There are multiple overlapping levels and expectations,” concludes Lindsay. “It’s what you want to make of it.”</p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/245413" target="_blank">Issue No. 144 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="Although it is backed by inhospitable mountains and empty steppes, Ulaanbaatar has become a hub for real estate due to it's status as the capital of resource-rich Mongolia" src="/documents/10204/0/Ulaanbaator2.jpg/f766fdfe-4013-43ba-a32d-44e38be93cd6?t=1518163592913" style="width: 1440px; height: 640px;" /></p> <p>Steamy, noisy and overpopulated, Karachi is – at least to those with unfair preconceptions of Pakistan – the epitome of a dysfunctional South Asian conurbation. </p> <p>Although it is known as one of the most liberal cities the country, and is a long-term hub for trade and commerce, the third most populous metropolis on the planet and home to over 23 million souls is not exactly the most obvious bet for investment in real estate. </p> <p>It is beset by chronic air pollution; the streets are often blocked due to choked sewerage lines and observance of traffic rules on the teeming roads is sketchy at best. Despite these issues, however, the city by the Arabian Sea has become one of the shining lights of a housing boom that has seen Pakistan serve notice of its status as a key potential market for international developers.</p> <p>There are numerous reasons why analysts are tipping developers to beat a path to Pakistan’s door – not least initiation of work on the USD46 billion China-Pakistan Economic Corridor. According to property web portal Zameen.com, average land prices in Karachi rose 23.4 percent in 2016. In Lahore, meanwhile, land prices increased 13.6 percent in the same year. </p> <p>Indeed, confirmation of the country’s status as a rising star came in May 2017 when Morgan Stanley Capital International (MSCI) announced the upgrade of its classification to the emerging market (EM) from the frontier market (FM) in its semi-annual review. The reclassification is set to result in greater inflows of funds from global investors who now have access to a huge EM pool of USD1.5-USD1.7 trillion.</p> <p>Considering the improving security situation in Pakistan, institutions like the World Bank, the IMF, Moody’s and S&P have also upgraded the country’s status.</p> <p>“Local investors who were previously investing in markets like Dubai are now willing to invest instead in Pakistan,” says Hammad Rana, associate director of sales and investment advisory for Colliers Pakistan. “If the security situation continues to improve we foresee demand increasing across the board. All this bodes well for the market and for any potential foreign investors or developers looking to enter.”</p> <p>Pakistan is far from the only nation in the region that carries the promise of significant returns for intrepid developers and investors willing to brave the inherent risks of entering relatively virgin territory. </p> <div class="pull-quotes-container">International developers often need to consider the possibility that a prospective goldmine can just as easily become a veritable minefield</div> <p>In South Asia, Sri Lanka and Bangladesh are both picking up a head of steam. Elsewhere countries such as Mongolia, Myanmar and even Cambodia – despite a troublesome glut of supply in the capital Phnom Penh – present significant allure due to their untapped potential. </p> <p>Yet with glittering opportunities come significant pitfalls. Collectively the less developed real estate markets in the region can blithely be grouped in the “up and coming” bracket. However, each one presents its own political, legislative and macro-economic challenges, from opaque governance and lax controls to arcane policies that protect the status quo. Therefore, international developers often need to consider the possibility that a prospective goldmine can just as easily become a veritable minefield. </p> <p>When it comes to the simplicity of doing business as an international developer, certain markets score better than others. Mongolia, for instance, is widely known for the foreigner-friendly regulations of its real estate market. </p> <p><a href="http://property-report.com/detail/-/blogs/mongolia-s-former-pro-wrestler-president-could-save-its-ailing-property-sec-11" style="font-weight:bold;" target="_blank"><strong>More: Mongolia's former pro-wrestler president could save its property sector</strong></a></p> <p>“Put simply, Mongolia has some of the most conducive real estate investment laws in Asia,” says Oliver Nicoll of Asia Pacific Investment Partners (APIP), a frontiers market specialist agency. </p> <p>“Capital gains and stamp duty for purchasers is set at zero. Income tax rates are notably low and there is no distinction between locals and foreigners in terms of ownership of immoveable property. Combined with latent demand for housing, investors and developers benefit from a supportive environment when developing in the country.” </p> <p>Indeed, experts have long identified the landlocked nation as a star among Asia’s emerging markets due to the vast mineral wealth – estimated at as much as USD2.5 trillion – that lies beneath its endless grassy steppes. </p> <p>Although the economy in the country has been battered in recent times due to the worldwide crash in commodities, analysts believe that the nation’s long-term wealth (and, therefore, the growth potential for real estate supply in the capital Ulaanbaatar) is assured.</p> <p>“Taking a long view, it seems likely Mongolia will benefit from the kind of wealth and investment experienced by other commodity rich nations,” adds Nicoll.</p> <p>Not every nation is fortunate enough to be sitting on a goldmine like Mongolia is, but other emerging markets around Asia have their own trump cards to play. </p> <p>Myanmar has opened itself up for Foreign Direct Investment (FDI) after being closed to the outside world by the former military dictatorship. Sri Lanka offers 1,600 kilometres of pristine coastline and an ever-improving infrastructure. Cambodia, meanwhile, has become known for its stability under strongman leader Hun Sen, its consistent economic growth of around 7 percent annually and for its expanding middle class – especially in the capital Phnom Penh. </p> <p><img alt="Stable governance and relaxed regulations make Cambodia's capital Phnom Penh a favourite among Asia's emerging real estate markets" src="/documents/10204/0/Phnom+penh.jpg/226954cc-3c11-4406-b336-ac9389ef1d32?t=1518167763000" style="width: 740px; height: 493px;" /></p> <p>Linking all these nations – as well as other, more developed, markets in the region is China’s One Belt, One Road initiative, with its multi-trillion dollar bid to reshape the world through a new network of maritime and landside links. </p> <p>Even better for international developers is the fact that, in many of these nations, a lack of experience and chops on the part of local developers opens up some serious opportunities. </p> <p>Nevertheless, the process of entering an unfamiliar market – with its myriad regulations, cultural sensitivities and quirks – is rarely plain sailing. </p> <p>In Pakistan, the arrival of big international developers including Emaar, Meinhardt and Al-Ghurair was greeted with much fanfare. Local investors believed that foreign companies would deliver better quality and deliver on time. That has not been the case. </p> <p>For example, Crescent Bay, Emaar’s showpiece project in Karachi was launched in 2008 with the promise of delivery of the first two apartment towers by 2011. As of December 2017, not a single apartment has been delivered. </p> <p>Foreign developers elsewhere have achieved better results. Despite its huge potential, Myanmar is regarded as one of the more difficult markets in Asia. There are numerous disadvantages to doing real estate business in the huge nation – the largest in mainland Southeast Asia – according to experts. These include a lack of middle class, limited availability of capital for buyers, little access to quality materials and no allowance for international developers. </p> <p><strong><a href="http://property-report.com/detail/-/blogs/the-rise-of-southeast-asia-s-sleepiest-capi-10" style="font-weight:bold;">More: The rise of Southeast Asia's sleepiest capital</a> </strong></p> <p>These barriers, however, failed to deter Singaporean developer Keppel Land, which marks 25 years of doing business in Myanmar next year after entering the country in 1993. The firm currently has a 40 percent stake (alongside Myanmar conglomerate Shwe Taung Group) in Junction City Tower, a 23-storey office tower that is part of Junction City, a mixed-use development which will also comprise the five-star Pan Pacific Hotel, a shopping centre and residential towers. It also has a 40 percent stake (again with Shwe Taung Group) in phase two of the Junction City project, which will offer a gross floor area of around 50,000 square metres via premium serviced residences and offices. </p> <p>“Through the years, we have been steadfast and have since developed keen market insights, understanding of the local culture as well as forged strong relationships with local partners, contractors and the local government,” says Sam Moon Thong, President Regional Investments for Keppel Land of its strategy for success in Myanmar. “This puts us in good stead to participate in Myanmar’s growth in the years to come.”</p> <p>In Sri Lanka, meanwhile, the biggest noise in terms of foreign developer activity has been from China. CHEC Port City Colombo, a subsidiary of state owned China Communications Construction Company is investing USD1.5 billion in reclaiming 270 hectares of new development land adjacent to Colombo Port for a new city within a city – the biggest and most controversial infrastructure project in Sri Lanka’s history due to its informal association with the One Belt, One Road initiative. </p> <p>Chinese developer Avic International, meanwhile, is behind Astoria, a large four-tower residential project in Colombo. It’s not just Chinese firms looking to get a slice of the action in the booming island nation though. Indian developer Indocean, Japanese firm Belluna and Singaporean company Silverneedle Group are all involved – either individually or as part of a joint venture – in projects in Colombo.</p> <p><img alt="Although there has been controversy about the extent of Chinese influence, projects such as the reworking of Colombo's port area are indicative of the growing status of Sri Lanka as a property player" src="/documents/10204/0/shutterstock_580878883.jpg/e723599d-ff4b-4ecd-aa53-c1e6b218e8c2?t=1518167071000" style="width: 740px; height: 493px;" /></p> <p>Although some analysts contend that the Colombo market – especially at the highest end – is nearing the point of saturation, there is a feeling that Sri Lanka’s growing geo-political significance and its potential for tourism could make it a major player in years to come. </p> <p>“Sri Lanka poses a whole raft of challenges for new-to-the-country real estate developers,” says Steven Mayes, managing director of JLL Sri Lanka. “These include a very conservative government lacking in transparency and consistency and somewhat arcane policies that protect, rather than challenge the status quo. Other challenges include high interest rates, a lack of skilled labour and the need to import the bulk of construction materials.”</p> <p>On the other hand, Sri Lanka is rapidly gaining in geo political significance as China invests heavily and as regional investors jockey for prominence, opening-up vast tracts of the country with new infrastructure, there are tremendous opportunities for the more adventurous developers, particularly in the hospitality sector.”</p> <p>Indeed, this push and pull between extreme negative and outstandingly positive conditions encapsulate the gameplay in Asia’s emerging nations. From Lahore to Ulaanbaatar, Kandy to Karachi, property development is a high-stakes hand. Numerous elements ranging from security concerns to labyrinthine regulations mean there’s always a risk of folding. But, for those who play their cards cannily, the prize pots can be vast. </p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/" target="_blank">Issue No. 146 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="" src="/documents/10204/0/uk-investment-feature-lead-image-compressor.jpg/3123e153-f9c1-4d2c-a5d2-6b6617741fc3?t=1518151158000" style="width: 1439px; height: 685px;" />Imagine watching a time-lapse film showing the changing face of London’s skyline. An endless succession of construction sites would appear alongside the River Thames, cranes and diggers coming and going, gleaming steel and glass buildings rising into the air.<br /> <br /> The redevelopment of areas such as Canary Wharf and South Bank is central to London’s modern-day identity. And, over the years, investors from Singapore to Russia have proven willing buyers for the city’s ever expanding portfolio of prime property, be it terraced townhouses in Chelsea or new-build penthouse apartments in Battersea.</p> <p>But in June 2016 a political event shook the UK, bringing with it a new addition to the English language: Brexit.</p> <p>The electorate narrowly voted to leave the European Union after 23 years as a member and negotiations regarding the exit deal are ongoing, but the result is likely to result huge change on many levels; political, economic, social and cultural.</p> <p>The property market in the capital is of course not immune to the fallout.</p> <p> </p> <div class="pull-quotes-container">Uncertainty fuelled by Brexit and a weakened government mandate since the June election means sentiment is fragile</div> <p> </p> <p>Prices for luxury homes in central London .... will flat line for the next 24 months as Brexit uncertainty and tax changes affect the market, according to a report published by global real estate agency Savills in September.</p> <p>“Uncertainty fuelled by Brexit and a weakened government mandate since the June election [when the ruling Conservative Party failed to win an outright majority that many had deemed as inevitable] means sentiment is fragile,” Lucian Cook, head of UK residential research at Savills, says.<br /> <br /> The slowdown is especially pertinent to London, given its position at the top of the UK luxury property tree. Savills estimates there were 394,000 properties worth GBP1 million (USD1.33 million) or more across the UK in 2016 – and almost two-thirds of those homes are in London. In Kensington and Chelsea in west London, almost half of all privately owned homes exceed the GBP1 million mark.</p> <p>The Savills report does predict that prices will start to recover towards the end of 2019, rising by 2 percent, with a stronger bounce back of 8 percent in 2020. </p> <p>David Galman is director of sales at Galliard Homes, which has spearheaded successful property developments in areas including the Docklands, Bermondsey, and Shoreditch.<br /> <br /> Galman acknowledges that Brexit “is an uncertainty” but cites other factors that were already affecting the prime property market including the introduction, in early 2016, of higher rates of stamp duty on additional residential properties, such as buy-to-let properties and second homes.<br /> <br /> “But, demand is stronger than I’d have anticipated. And this is across the board, all the way up to the prime market,” he says.</p> <p><a href="http://property-report.com/detail/-/blogs/amanda-levete-wins-the-jane-drew-pri-3" target="_blank"><strong>More: Architect Amanda Levete wins the Jane Drew Prize</strong></a><br /> <br /> “There's a different volume of demand. I might get 20 viewings a week for a property at a quarter of a million pounds, and two viewings a week for a scheme at two million pounds. And that makes obvious economic sense, there is less demand at the top. There is still movement in the prime market, especially in regeneration areas and near to transport links.”</p> <p>Current popular prime London locations include St John’s Wood, Wapping, Shoreditch, the redeveloped King’s Cross area, and Canary Wharf, with the latter two having the added appeal of being near Crossrail, a cross London service which will connect Berkshire, Essex and Heathrow Airport with the capital, which opens fully in 2018.</p> <p>According to Galman, demand from Asia remains strong. Singaporeans, Malaysians and investors from Hong Kong have long been London-centric in terms of buying property. In more recent years, interest from Chinese buyers has inevitably been on the increase. About 25 percent of Galliard Homes’ business currently comes from Asia, he adds.<br /> <br /> “I think that will increase in the next few years because they will want to take advantage of the weaker pound, which is probably here to stay. And it's a huge advantage for investors outside of the UK.”</p> <p>The current exchange rate certainly presents a mix of fortunes depending on perspective; it’s a gloomy outlook for those who trade and buy in sterling, but great news for investors from around the world. Following a wobble in 2016, there has been renewed interest from investors outside the UK thanks to the low pound.</p> <p>“Overseas investors have been encouraged by the favourable exchange rate and canny buyers have been waiting to see if the exchange rate gets any lower,” Jennet Siebrits, head of residential research at CBRE, says. “And they’ve found that, more or less, the rate has reached its floor.</p> <p><a href="http://property-report.com/detail/-/blogs/malaysian-consortium-to-sell-stake-in-apple-s-future-london-headquarters-buildi-7" target="_blank"><strong>More: Malaysian consortium to sell Apple’s future London headquarters building</strong></a><br /> <br /> “We are definitely in a better place than 2016 and Brexit doesn’t appear to be a major factor for our buyers.”<br /> <br /> These notes of optimism are perhaps best understood when examining the context of London’s rise to global player in the property field. Between 1979 and 2014 the prime central London market delivered average annual house price growth of 5.7 percent above the rate of inflation. The so-called ‘promotion’ phase from 1979 was characterised by the emergence of London as a premier world financial centre. The deregulation of the financial sector in 1986 enabled a massive expansion and business owners, bankers and traders started to arrive from overseas, boosting demand for homes in the city centre.</p> <p>As London developed as a world city, so it became a magnet for increasingly wealthy individuals from around the globe. Although its property market took a severe hit during the financial crisis in 2007, a secure foundation aided its recovery.</p> <p> </p> <div class="pull-quotes-container">I was having lunch with a client in Canary Wharf, and we were looking out at all of these gleaming towers. The headlines suggest that people are going to up sticks and move to Frankfurt or Paris, but it's a bit of a myth</div> <p> </p> <p>Galman believes that weathering financial storms is part and parcel of the property development business.</p> <p>“We’ve enough experience to know that, despite Brexit or the like, the market can and will turn,” he says. “And I don’t feel too worried about it. I was having lunch with a client last week at my office in Canary Wharf, and we were looking out at all of these gleaming towers.<br /> <br /> “The headlines suggest that people are going to up sticks and move to Frankfurt or Paris, but it's a bit of a myth. Economically it makes sense for them to have their HQ here and for them to work here, and so they're going to want to buy property here. The fact is, London still has a very strong draw.”</p> <p>CBRE’s Siebrits says she is optimistic for two main reasons. “Firstly, I’m an economist. I look at evidence of the past and how the market has gone up and down. We always say to our investors, look at the long term. Property is not a liquid asset and you need to be able to withstand the shocks. There may be downturns but if you hold onto a property for 10 years you’ll get growth.</p> <p>“The other thing is, we’re actually a very resilient economy. There’s a lot of talk at the moment about financial services and how they are at risk from Brexit. Actually this sector is a small part of our economy. Since the financial crisis, there has been a blossoming in the technical and creative industries in London. There are more than 440,000 employees in these sectors. These people need places to live.”</p> <p><a href="http://property-report.com/detail/-/blogs/uk-ownership-register-to-bring-out-concerns-among-asian-investo-4" target="_blank"><strong>More: Should Asian investors worry about the upcoming UK ownership register?</strong></a></p> <p>Also keeping the London market regular is healthy demand from Hong Kong and China, largely on the back of education. Five percent of overseas students in London are from China, according to Siebrits.<br /> <br /> Although Brexit will continue to have an influence on the prime property market, other factors – with pros and cons – are also at play. And while there is always potential for upheaval, there is always room for recovery.</p> <p>“London will almost certainly remain a key global financial centre and can develop as a key European hubs for the growing tech sector,” Savills’ Cook says.</p> <p>“This means London’s prime housing stock will continue to benefit from new sources of domestic wealth generation, as well as attracting wealthy overseas buyers. Returns in the future will reflect this low-risk world status.”</p> <p>It would appear that when prime London real estate once again represents identifiably good value and the fog of uncertainty clears, further growth is inevitable. In other words, the time-lapse movie is a long way from completion.</p> <h3>Millionaire’s club</h3> <p>The smallest GBP1 million homes are found in Kensington and Chelsea, where a seven-figure price tag will on average pay for only 806 sq ft. South of the Thames, the same price-tag will stretch to just over 1,200 sq ft in Wandsworth and around 1,300 sq ft in Richmond. For London’s biggest GBP1 million homes, buyers will need to look east to Havering in Essex where the average is almost 2,500 sq ft. Beyond the capital, GBP1 million will go much further. Oxford and Cambridge are the two most popular choices, where investors will get twice as much space for their money. Similarly, in the established commuter hotspots of Elmbridge and St Albans, buyers can expect to find a property of 1,800 sq ft and 1,740 sq ft respectively. For those willing to look further afield, Bristol and Bath both offer around 2,500 sq ft for GBP1 million, while in Harrogate, Rushcliffe and Stratford-upon-Avon, this figure will stretch to about 3,000 sq ft.</p> <h3>Making tracks</h3> <p>London’s population is booming and is estimated to reach 30 million by 2030. With the city’s much-loved tube system already stretched to breaking point, hopes are being pinned on the new Crossrail project to ease congestion and take the strain off existing transport infrastructure. The first phase of the project, better known as the Elizabeth Line, is due open fully from December 2018. When complete, the 118-kilometre long line will run from Berkshire in the west through central London to Essex in the east. A second phase of the Crossrail initiative – known as Crossrail 2 – is currently in the consultation process. If approved, it would provide a rail link across London between Surrey in the south west to Hertfordshire in the northeast. </p> <h3>London's most exciting projects</h3> <h4>No. 1 Grosvenor Square</h4> <p><img alt="" src="/documents/10204/0/Grovesnor-Square-compressor.jpg/f5793195-2ac2-4391-875f-8653b3846107?t=1518170877408" style="width: 740px; height: 493px;" /></p> <p>Developer: Lodha Group<br /> Total area: 135,000 sq ft (12,542 sqm)<br /> Number of units: 44<br /> Price: From GBP7.5m (USD9.9m)<br /> Location: Mayfair W1 <br /> Completion date: 2019<br /> X-factor: one of Mayfair’s most prominent buildings, once home to the high commissioners of the US and Canada</p> <h4>West End Gate</h4> <p><img alt="" src="/documents/10204/0/West-End-Gate-compressor.jpg/3b27b6ac-11b4-442c-8a30-033a89cec2d1?t=1518170930089" style="width: 740px; height: 567px;" /></p> <p>Developer: Squire and Partners<br /> Unit size: 452-1,394 sq ft (42-129 sqm)<br /> Number of units: 652<br /> Price: From GBP680,000 (USD898,000)<br /> Location: Paddington W2 <br /> Completion date: 2020<br /> X-factor: energy-efficient design and prime, central location</p> <h4>Chelsea Barracks</h4> <p><img alt="" src="/documents/10204/0/Chelsea-Barracks-compressor.jpg/8f552ad6-4845-471d-9d15-476da7813100?t=1518170965560" style="width: 740px; height: 493px;" /></p> <p>Developer: Qatari Diar<br /> Unit size (avg): 4,200 sq ft (390 sqm) for phase 1<br /> Number of units: 448<br /> Price: GBP2-50m (USD2.6-66m)<br /> Location: Chelsea SW3 <br /> Completion date: 2024<br /> X-factor: five acres of green space inspired by Belgravia’s traditional garden squares</p> <h4>Rathbone Square</h4> <p><img alt="" src="/documents/10204/0/Rathbone-Square-compressor.jpg/c963a8cb-d838-4fab-89cf-92b95f11d7bd?t=1518171179955" style="width: 740px; height: 555px;" /></p> <p>Developer: Great Portland Estates<br /> Unit size: From 546 sq ft (51 sqm)<br /> Number of units: 162<br /> Price: From GBP7.1m (USD9.3m)<br /> Location: Fitzrovia W1 <br /> Completion date: 2017<br /> X-factor: very close proximity to Facebook’s London HQ</p> <h4>Goodluck Hope</h4> <p><img alt="" src="/documents/10204/0/Goodluck-Hope-compressor.jpg/ae4402e5-bd18-4f8f-85b4-f8878176d899?t=1518171259674" style="width: 740px; height: 555px;" /></p> <p>Developer: Ballymore<br /> Unit size: 417-1,200 sq ft (39-111 sqm)<br /> Number of units: 804<br /> Price: GBP335,000-1.6m (USD442,000-2.1m)<br /> Location: Leamouth Peninsula E14<br /> Completion date: Q3 2019<br /> X-factor: located in a leading arts and cultural destination</p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/255811" target="_blank">Issue No. 145 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="" src="/documents/10204/0/indonesia-feature-144-lead-compressor.jpg/44713b9c-266e-4836-85f1-84493fa1598b?t=1517826563749" style="width: 1440px; height: 695px;" />Straddling the equator for almost 3,000 kilometres, Indonesia is one of Asia’s wildest rides. </p> <p>No year is a slow news year in the diverse and often divided nation – the world’s most populous Muslim country – but 2015 was particularly lively. </p> <p>The year began in tragic fashion with divers recovering the flight data recorder from the crashed Indonesia AirAsia Flight 8501, a disaster that claimed the lives of 155 passengers. The archipelago continued to hit the headlines throughout the year, with the executions of the Bali Nine drug smuggling gang and raging forest fires attracting press far beyond the country’s borders.</p> <p>With all this going on, it was easy to ignore a less dramatic – but equally impactful (at least in a domestic sense) – 2015 trend that has continued to reverberate through the nation’s real estate market.</p> <p>For it was the year that marked the end of a supercharged housing boom that some had predicted would carry on indefinitely and the start of a period of protracted stagnation: a malaise that has been most pronounced in the higher echelons of the market.</p> <p>“It was a difficult year across the board for real estate in Indonesia, for a variety of reasons,” explains James Taylor, head of research for JLL Indonesia. “A new president (current incumbent Joko Widodo) had just entered office with his own political and economic agenda. </p> <p>“What’s more the Indonesian rupiah was depreciating and economic growth was sub 5 percent. People here have very vivid memories of the Asian Financial Crash and when they saw the rupiah sliding like it was, it definitely scared more than a few people off.”</p> <p><a href="http://property-report.com/detail/-/blogs/here-are-all-the-winners-from-the-3rd-propertyguru-indonesia-property-awards-20-1" target="_blank"><strong>More: Here are all the winners from the 3rd PropertyGuru Indonesia Property Awards 2017</strong></a></p> <p>Another legacy of 2015 that wealthy investors found – and continue to find – frightening was the ramping up of taxes on luxury property under President Widodo’s regime. </p> <p>A large portion of Widodo’s initial appeal was based on his populist agenda. He was voted into power in 2014 armed with promises of vast public spending on infrastructure projects throughout the nation. His government also vowed to slash Indonesia’s budget deficit. </p> <p>The country’s booming property sector, which was then witnessing year-on-year price rises of up to 17 percent on new condominiums, especially in the capital Jakarta, was a convenient revenue source. </p> <p>As such, a 20 percent luxury tax on the sales price was made applicable on houses with a sale price of IDR20 billion (USD1.5 million) and apartments priced at IDR10 billion or more. </p> <p>As if the tax wasn’t bad enough. The slump in global oil and gas prices resulted in an exodus of expatriates from Indonesia, denying investors in luxury property an obvious source of rental income. And, with yields on high-end units in Jakarta currently sitting at a meagre – considering the outlay required – 3-5 percent, there appears to be little-to-no appetite from investors to return to the luxury fray. </p> <p>“There’s been a feeling among investors that an apartment worth IDR10 billion is – while expensive by the standards of ordinary Indonesians – not exactly high up there in the luxury bracket,” Taylor says. “Therefore, with the 20 percent government levy and low rental yields, it’s hardly surprising that demand is virtually non-existent at this end of the market.</p> <p>“It will take the scrapping of the luxury tax, or a more scaled version of it, to really change sentiment in this part of the market.”</p> <p>It’s a remarkable turnabout from the pre-2015 years when Jakarta was one of the world’s hottest markets for luxury property. And while experts cite historically low inflation levels of around 4.5 percent, low interest rates and pent-up demand among investors as indicators of a possible recovery, there’s unlikely to be any repeat of the 37.7 percent appreciation on prices for high-end homes witnessed in 2013.</p> <p> </p> <div class="pull-quotes-container">I think that we won’t start to see the market really pick up until after the next presidential election</div> <p> </p> <p>It seems instead that the real estate sector in Jakarta and across Indonesia is going through a period of retrenchment in the years leading up to the next presidential election in 2019. </p> <p>“Market conditions remain soft and challenging and will continue to be so in 2018,” says Hendra Hartono, CEO of Leads Property Services Indonesia, and chairman of the PropertyGuru Indonesia Property Awards judging panel. “I think that we won’t start to see things really pick up until after the next presidential election. Also, by that time, major infrastructural projects will be completed or near completion in Jakarta and other major cities and we’ll see a growth in demand around in where those are a factor: such as neighbourhoods serviced by MRT and LRT lines in Jakarta for instance.”</p> <p>Despite the ongoing malaise in the top tier of the sector, analysts point to several factors as antidotes to the tidings of doom and gloom that are a usual consequence of market stagnation. </p> <p><a href="http://property-report.com/detail/-/blogs/sinar-mas-land-group-ceo-to-be-honoured-at-propertyguru-indonesia-property-awards-ga-1" target="_blank"><strong>More: Sinar Mas Land group CEO to be honoured at PropertyGuru Indonesia Property Awards gala</strong></a></p> <p>“While it’s correct to say that speculative investment has been very minimal, transactions have been driven by real demand,” says Mina Ondang, director at PT Cushman & Wakefield Indonesia. “Just because the luxury market has fallen off a cliff, it doesn’t mean that everything has ground to a halt. Instead, developers are tapping into Indonesia’s rapidly expanding middle class, its growing urbanisation and changing lifestyle demands. The population and middle class are still growing and these are cornerstones underlying demand.”</p> <p>And while a current average sales rate of 67 percent in the greater Jakarta area pales in comparison to the 80 percent recorded in the middle of 2015, it is – as Taylor of JLL reiterated in a recent interview with the Jakarta Post – “better than other countries in Asia.”</p> <p>The consensus view certainly chimes with the feeling that macro-economic conditions have turned back in Indonesia’s favour. High-profile infrastructure projects including the Jakarta MRT and LRT, the JORR2 (Jakarta Outer Ring Road 2: a planned toll road circling greater Jakarta) and the Jakarta to Bandung High Speed Rail have all been beneficiaries of the government’s drive to reinvigorate the nation’s creaking infrastructure. </p> <p> </p> <div class="pull-quotes-container">We are seeing demand from people who enjoyed Bali 15 years ago on Lombok</div> <p> </p> <p>The government too has issued several policies to stimulate real property performance, including amending loan to value percentage from 70 to 80 percent for housing loans and cutting income tax rate from property sales from 5 to 2.5 percent.</p> <p>With mass-transit systems and new roads likely to ease and help circumnavigate the worst of Jakarta’s notoriously hellish traffic, analysts predict growth in developer activity in areas outside the city’s CBD. </p> <p>“South Jakarta and West Jakarta are both likely to grow in popularity,” says Taylor. </p> <p>“Things are slow, but they are stabilising,” adds Hartono. “Developers are launching projects that they can sell. Some of the most interesting investments can be found in Greater Jakarta in areas such as Tangerang, Bekasi and Bogor as property there is still very affordable. There’s also an abundance of land, which makes these areas a good bet for long term developments.”</p> <p>In fact, the profusion of available land in greater Jakarta and the relaxation in mortgage lending rules have brought developers back to the table: with many Chinese firms moving in. PT Sindeli Propetindo Abadi, a subsidiary of Wuzhou Investment Group, plans to develop 3,700 units in East Jakarta with an investment worth approximately USD150 billion. Other Chinese groups making a move in Indonesia include Hongkong Land, China Sonangol, China Communications Construction Group (CCCG) and Kingland Group.</p> <p>It’s quite the statement of intent, but observers doubt whether the demand-supply ratio quite adds up – at least for the moment.</p> <p>“Such immense investment to create a huge supply of property is not matched by demand from buyers,” says Cornel B Juniarto, senior partner at Hermawan Juniarto, a leading Indonesian law firm. “But as the economy grows we believe that demand will grow and the situation will achieve more of a balance.” </p> <p>Chinese developers are extending their reach outside Jakarta as well. CCCG, which plans to invest USD1 billion in a mixed-use project in West Jakarta, intends to expand its property business to other cities, such as Surabaya in East Java and Medan in North Sumatra: both cities with historically large populations of ethnic Chinese. </p> <p><img alt="As Bali falls victim to overdevelopment and eye-watering rises in land prices, second-home investors are setting their sights on its near-neighbour Lombok, which offers similarly paradisiacal attributes at a more reasonable sum" src="/documents/10204/0/indonesia+feature+2.jpg/63f430de-270b-4231-8c9d-1b25d8489ff3?t=1517827725675" style="width: 740px; height: 331px;" /></p> <p>Elsewhere in the archipelago, secondary cities such as Bandung, Makassar and Manado have all been recording strong growth in demand in their residential sectors. Meanwhile, Bali and Lombok – the nation’s two most popular holiday islands and favourites for second-home buyers – are experiencing quite different conditions. </p> <p>The Bali market is, some say, a victim of its own success, with buyers shying away from eye-watering land prices, overbuilding and uncontrolled and polluting developments. Lombok, contrastingly, is hitting a sweet spot with investors due to its natural attributes and value relative to its neighbour across the Lombok Strait.</p> <p>“We are seeing demand from people who enjoyed Bali 15 years ago and want a villa in a quieter, less crowded island for a fraction of the price they would pay on Bali or in their home country,” says Andrew Corkery, the managing partner of resort developer Selong Selo Group, which offers numerous luxury properties to buy on Lombok. </p> <p>From villas on idyllic palm-fringed islands to Chinese steered developments in the nether regions of Greater Jakarta, Indonesia’s amazing diversity is reflected in its real estate offerings. And if temperatures in the real estate sector are dialled down for now, the country has proved time and time again that it’s a safe bet for twists and turns. </p> <h3>Foreigner unfriendly</h3> <p>In late 2015, Indonesian President Joko Widodo signed a government regulation that allows foreigners who reside in Indonesia to own landed houses in the country for a period of 80 years. Theoretically, this weakening of the country’s historically strict restrictions on foreign ownership was introduced with the intention of spurring some expat investors into action. In practice, however, the barriers against foreign ownership remain prohibitive to all but the wealthiest and determined investor. For a start, foreign ownership of landed houses or apartments falls under the so-called “right-of-use” category, locally known as hak pakai, which is weaker than the “right of ownership” category granted to Indonesian citizens. Those wishing to purchase a property under hak pakai are ineligible for any kind of mortgage or credit. Other requirements, meanwhile, include only buying property at a fixed minimum price, only purchasing property direct from a developer and not being allowed to rent out property in Indonesia to a third party. </p> <h3>The amnesty impact</h3> <p>When the government granted tax amnesty to wealthy Indonesians in a bid to repatriate assets, many felt that the country’s real estate industry would be a major beneficiary. Analysts and stakeholders expected part of the asset repatriations into Indonesia to flow to property, either through ownership or development projects. Furthermore, the amnesty programme was also expected to spur investors to appreciate their property values as before they did not to avoid taxes. As of March 2017, the government has successfully clawed back IDR146 trillion. However, the impact of the programme has thus far been negligible. Nevertheless, according to the Association of Indonesian Real Estate Companies, the sector will begin to feel the benefits of the amnesty by the third to fourth quarter of 2017. </p> <h3>Indonesia's most exciting projects</h3> <h4><u>Jakarta</u></h4> <p><strong>Serenia Hills </strong></p> <p><strong><img alt="" src="/documents/10204/0/SERENIA-HILLS-2-compressor.jpg/5658f1a6-2785-4ace-ab56-acc3a81f463c?t=1517829617217" style="width: 740px; height: 496px;" /></strong></p> <p>Developer: PT Intiland Development Tbk<br /> Size: 150-300 sqm<br /> Number of units: 460<br /> Price: USD1,200 per sq ft (avg)<br /> Location: Lebak Bulus<br /> Completion date: 2017<br /> X-factor: Extensive green open spaces</p> <p><strong>The Mansion at Le Parc</strong></p> <p><strong><img alt="" src="/documents/10204/0/MANSION-AT-LE-PARC-compressor.jpg/88d9156d-fdc0-42e5-a60b-d72fdea25955?t=1517829648084" style="width: 740px; height: 463px;" /></strong></p> <p>Developer: PT Putragaya Wahana<br /> Size: 1,050 sqm (avg)<br /> Number of units: 29<br /> Price: USD5,450 per sqm (avg)<br /> Location: Thamrin<br /> Completion date: 2017<br /> X-factor: Fully integrated lifestyle and office amenities</p> <p><strong>Synthesis Residence Kemang</strong></p> <p><strong><img alt="" src="/documents/10204/0/SYNTHESIS-compressor.jpg/483ecdac-58ed-4d6e-8e51-f86a99012832?t=1517829677310" style="width: 740px; height: 555px;" /></strong></p> <p>Developer: Synthesis Development<br /> Size: 70-80 sqm<br /> Number of units: 1,180<br /> Price: USD172,400 (avg)<br /> Location: Jalan Ampera Raya<br /> Completion date: 2018<br /> X-factor: Proximity to entertainment venues</p> <h4><u>Lombok</u></h4> <p><strong>Selong Selo Residences </strong></p> <p><strong><img alt="" src="/documents/10204/0/SELONG-SELO-4-compressor.jpg/856868d6-b980-4d2a-9a29-c4ae311a80f8?t=1517829703444" style="width: 740px; height: 555px;" /></strong></p> <p>Developer: The Selong Selo Group<br /> Size: 279 sqm (avg)<br /> Number of units: 80<br /> Price: USD974 per sqm (avg)<br /> Location: Selong Belanak<br /> Completion date: 2018<br /> X-factor: Natural valley location</p> <h4><u>Makassar</u></h4> <p><strong>The St. Moritz Makassar </strong></p> <p><strong><img alt="" src="/documents/10204/0/ST-MORITZ-2-compressor.jpg/55c55ce9-6230-4dd1-b3fb-85a5b7a55e9a?t=1517829751738" style="width: 740px; height: 362px;" /></strong></p> <p>Developer: PT Lippo Karawaci Tbk<br /> Size: 70 sqm (avg)<br /> Number of units: 286<br /> Price: USD1,500 per sqm (avg)<br /> Location: Jalan Panakkukan<br /> Completion date: 2018<br /> X-factor: Proximity to airport</p> <h4><u>Surabaya</u></h4> <p><strong>One Icon Residences </strong></p> <p><strong><img alt="" src="/documents/10204/0/ONE-ICON-compressor+2.jpg/7ea8132b-f204-4997-a228-32a9d717a6e7?t=1517829945582" style="width: 740px; height: 567px;" /></strong></p> <p>Developer: PT Pakuwon Jati Tbk<br /> Size: 120 sqm (avg)<br /> Number of units: 493<br /> Price: USD3,078 per sqm (avg)<br /> Location: Tunjungan <br /> Completion date: 2018<br /> X-factor: Sky garden, lagoon-style pool</p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/245413" target="_blank">Issue 144 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="The beach at Forest City in Johor, Malaysia. BroNrw/Shutterstock" src="/documents/10204/0/shutterstock_488236915-compressor+%281%29.jpg/c42e52ba-1b41-436a-8fda-2cfc87a31a61?t=1517546283128" style="width: 740px; height: 466px;" />As the old philosophical question goes: "If a tree falls in a forest and no one is around to hear it, does it make a sound?" At Forest City, a mega-project built by Country Garden, China’s third-largest residential developer, recent silence has been deafening.</p> <p>The Guangdong-based firm announced in 2016 its Forest City project would generate huge annual sales of CNY20 billion (USD3 billion) out of total company revenues of CNY300 billion – or nearly 7 percent of total sales. </p> <p>Forest City ranks as the largest residential development in Iskandar Malaysia, a special economic zone just a few miles from Singapore dubbed the “new Shenzhen” by sponsors including the Sultan of Johor after whose father Iskandar is named.</p> <p>In recent months, previously bold pronouncements have all but dried up. Beijing has announced stricter capital controls designed to shore up the faltering yuan and quell outflows of cash overseas for acquisitions deemed “irrational” in sectors including real estate.</p> <p>“The outward restrictions have really been more on the corporate side,” Andrew Polk, a founding partner of the Beijing-based investment advisory firm Trivium China, says. “But they’ve also been trying to shut down illegal forms of purchasing houses.”</p> <p><a href="http://property-report.com/detail/-/blogs/malaysia-s-luxury-market-malaise-drags-22" target="_blank"><strong>More: Malaysia's luxury market malaise drags on</strong></a></p> <p>As a non-convertible currency, the yuan must be converted inside China, but there’s a catch: currency can only be exchanged for approved purchases, which does not include real estate. Individual Chinese citizens are nonetheless allowed to change up to USD50,000 per year for travel and other personal expenses overseas. </p> <p>Eager to circumvent these strict rules, many Chinese have taken to what is known as ‘smurfing’: pooling individual currency quotas among family members and friends who then send small sums overseas to avoid scrutiny by banks and financial regulators.</p> <p>Country Garden appeared to tailor Forest City perfectly to this system. Many of its units went on sale for about USD200,000 paid for through instalments. Then Beijing started to close these loopholes. Alipay, the popular mobile payment platform, has stopped processing overseas payments under pressure from the Chinese central government. In March, UnionPay, the primary bank card platform in mainland China, followed suit as it barred mainland customers from making transactions in Hong Kong to pay for property. </p> <p>Many Chinese had been making overseas payments by crossing into the territory where currency restrictions are more relaxed.</p> <p>Suddenly, the flood of Chinese crossing over to Johor from Singapore has slowed. Country Garden had been flying over plane-loads of mainland Chinese, reporting that 50 percent ended up signing contracts to buy apartments. Then in March, Country Garden announced it was closing showrooms across China to comply with Beijing’s tighter capital controls.</p> <p> </p> <div class="pull-quotes-container">They try to attract tier-one and tier-two city buyers who have high purchasing power to visit projects for free. Half of the buyers are actually locals who think large numbers are going to invest in that project and earn a profit from reselling</div> <p> </p> <p>The developer has subsequently found itself caught in a difficult spot. It wants to maintain the huge flow of potential customers from China into Johor to keep sales ticking over but must appease a government it knows can do more serious damage to its overall multi-billion-yuan business.</p> <p>This in turn has created a marketing problem. The illusion of demand – now lost – has been vital for Country Garden, according to David Hong, head of research at China Real Estate Information Corp which tracks property trends in China.</p> <p>“They get a lot of Chinese tourists to visit these projects to make them seem highly attractive so that more locals [Malaysians] and Singaporeans will come and have a look,” he says. “If you look at Country Garden in lower-tier cities in mainland China you also see a similar strategy. </p> <p>“They try to attract tier-one and tier-two city buyers who have high purchasing power to visit projects for free. Half of the buyers are actually locals who think large numbers are going to invest in that project and earn a profit from reselling.”</p> <p>The disappearance of Chinese buyers has pushed Country Garden to redouble its marketing and sales effort to potential customers in the likes of Thailand, Singapore and the Middle East. Meanwhile, Chinese buyers who paid a down-payment but can longer meet instalment obligations are desperately trying to get their money back.</p> <p><a href="http://property-report.com/detail/-/blogs/what-s-next-for-the-malaysian-property-market-in-201-3" target="_blank"><strong>More: What's next for the Malaysian property market in 2018</strong></a></p> <p>On WeChat, China’s most popular social media platform, disgruntled buyers have formed a group called ‘Quit Forest City and get refunds’, and many have tried to seek out lawyers to fight back.</p> <p>Assessing just how many Chinese buyers have been impacted and what this means for occupancy rates at Forest City remains difficult. Many in the property sector have maintained silence around a development upon which fortunes depend, including the Sultan of Johor, a joint-venture partner at Forest City alongside Country Garden. Indeed, several sources including Country Garden itself and UEM Sunrise, the biggest landowner in Iskandar, declined to comment for this article.</p> <p>Recent figures from analysts don’t make great reading. In its first half report of Malaysia’s property market Knight Frank reported a 6.8-percent decline in residential transactions in Johor. It cited Chinese capital controls as a key factor “amid a widening gap between supply and demand” for high-end condos across Malaysia. </p> <p>While the state of Johor, its economy and buyers at Forest City face an uncertain future, Country Garden appears largely unaffected. Its share price has soared in Hong Kong trading in 2017, prompting DBS Group – among other analysts – to upgrade the stock to ‘buy’ in August. The same month, Moody’s upheld its Ba1 rating for Country Garden without mentioning its Malaysia woes, or capital controls imposed by Beijing.</p> <p>“For projects overseas by Country Garden there would be some execution risk,” Franco Leung, a Hong Kong-based vice president and senior credit officer at Moody’s, says. “But we see that any impact from that project is manageable.”</p> <p>So at least some good news for a firm that has staked so much on Johor. But given the scale of the development and the brake on its momentum, it remains to be seen if Forest City itself will make it out of the woods.</p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/255811" target="_blank">Issue 145 of PropertyGuru Property Report Magazine</a></em></p>
<p><img alt="" src="/documents/10204/0/proptech+144+lead+image.jpg/87517b55-d702-441c-8115-d9a3a3761ad1?t=1516786706809" style="width: 740px; height: 367px;" />In the mid-1990s, the process of building and marketing properties, whether commercial or residential, was a business model that seemed impervious to change. Construction conglomerates and architecture firms designed our urban landscapes, while high-street estate agents proliferated and profited from what was at the time a thriving property market. </p> <p> </p> <p>But in Silicon Valley and beyond, technocrats were shepherding a new medium into a range of innovative ways for consumers to access information – the silent revolution that was the internet – and the earliest seeds of property technology, or proptech, were sown with a brace of home-search websites that are now household names. For the first time, these were not brick-and-mortar businesses with receptionists, display collateral or chatty agents, but online brands that enabled movers to surf detailed web pages and arrange viewings with a few clicks of a mouse.</p> <p> </p> <p>Beyond websites, the definition of proptech has since snowballed dramatically, encompassing apps as well as virtual and augmented reality (VR/AR).</p> <p> </p> <p>"The first generation of proptech, although it wasn't called it then, emerged around 2000 with the early online property listing sites. This was the first sign of the industry moving digital," says Jack Fitzgerald, founder of Disrupt Property, a leading database of proptech startups. "Then around 2010, we began to see this move beyond residential listings to include platforms like Houzz (interior design), VTS (office leasing) and Matterport (virtual reality). </p> <p> </p> <p>"Now the definition of proptech is as broad as can be, with startups attempting to disrupt every part of the industry – how we build, market, transact, fund, manage and then sell property."</p> <p> </p> <div class="pull-quotes-container">The Asia Pacific region is where proptech will make a significant leap and lead the charge, even though the United States and Europe have had a head start</div> <p> </p> <p>As home-seekers have benefited from the automation of clerical tasks and reduced agent interaction, developers, architects and consumer internet companies have embraced the wider applications of proptech. In 2017, VR and AR are being used not just to market new buildings – public and corporate spaces as well as homes – but also to design them.</p> <p> </p> <p>It’s a marked shift from the millennial proptech pioneers. Back then, as global uptake of the internet began to soar, companies like the pioneering US online estate agent Realtor, which was established in 1995, were predating the impending dotcom boom. Rightmove – a joint online venture between four of the UK’s largest estate agents – established a home-search website in 2000 that despite considerable competition remains the largest such portal in the country with advertisers providing the foundation for their revenue. In Hong Kong meanwhile, Gohome.com.hk became a go-to site for tech-savvy house-hunters in 1999.</p> <p> </p> <p>While these pioneers have since expanded to appeal to wider marketplaces, newer companies have begun to hone in on niche services that address burdensome processes in property transactions. In the UK, firms such as Goodlord and No Agent now offer specific services such as admin simplification for tenants and easier management for private landlords. </p> <p> </p> <p><a href="http://property-report.com/detail/-/blogs/7-proptech-trends-to-watch-out-for-in-20-9" target="_blank"><strong>More: 7 proptech trends to watch out for in 2018</strong></a></p> <p> </p> <p>"Many of the traditional online listing sites are leading the way in proptech innovation by embracing virtual reality, big data, agent rankings, neighbourhood guides and so on," Fitzgerald adds. "Property buyers now have more options and information than ever before available online and for free. They can research everything about a potential purchase: the house, the neighbourhood, the likely yield, capital growth, even walk down the street using google maps. The market is becoming increasingly transparent and with it buyers are becoming more savvy, so listing sites are responding to that by continually adding new features."</p> <p> </p> <p>The way forward for home-search sites may well lie in firms like Compass, valued at more than USD1 billion – dubbed the “Pinterest of real estate” by Forbes.com. It started in 2013 as a one-stop upmarket real-estate broker in New York before expanding across the States to operate in nine desirable locations nationwide. To succeed in an industry as fraught with pitfalls as property, through a medium as inherently impersonal as cyberspace, requires a robust, people-focused strategy: accordingly, marketing has been a strong point. Compass succeeded in pinpointing a boutique niche – an O2O (online-to-offline) agency with a specific market in mind – and supplying both the tech props and people skills to realise its goal. As Compass CEO Robert Reffkin describes it, “we’re building tools for brokers.”</p> <p> </p> <p>In China, one of the most fragmented and competitive housing markets in the world, Shanghai-based real-estate portal Aiwujiwu has in just three years become a leading forum for nest-seekers in mainland China and a “billion-dollar unicorn”. With a name that translates in English to “love me, love my house”, it was venture-funded by stakeholders including Singaporean holding company Temasek. The manic economic growth spurt the PRC has experienced this decade (a time in which the residential real-estate market has grown a staggering 9 percent annually), allied to an upsurge in internet usage, has led to massive demand for platforms such as giants SouFun and Leju, which offer extra services such as home furnishing.</p> <p><img alt="While hard-copy advertisements and posters for real estate are very much a thing in China and Hong Kong, the industry there is moving online at a rapid pace" src="/documents/10204/0/proptech-144-image-2-compressor.jpg/41290884-d17e-4459-a562-8dabdebc4749?t=1516786997808" style="width: 740px; height: 493px;" /></p> <p>While Western and North Asian companies have led proptech’s early charge, in Southeast Asia progress in the area was comparatively slow. Only a decade ago, British tech entrepreneur Steve Melhuish together with his Finnish business partner Jani Rautiainen, set up PropertyGuru Group in Singapore, making extensive property listings – complete with specifications, photos, addresses, prices and contact details – readily available to anyone with an internet connection. The site built its profits by carrying advertising and in printed newsletters, and by charging agents a fee to use the platform – and ultimately proved a key driver in the region’s incipient proptech industry.</p> <p> </p> <p>“Even though Singapore’s infrastructure was impressive in 2007, technologically it was not known for products at all,” says Hari Krishnan, PropertyGuru CEO and former vice president and managing director of LinkedIn for Asia Pacific and Japan. “China, India, Japan and Korea – these are the countries that produce consumer internet companies. All the Southeast Asian majors – GO-JEK, Agoda – are from Indonesia and Thailand. Steve and Jani saw an opportunity where there was a lack of transparency and digitisation; you had to wait for your Saturday classified supplement to understand what was happening in the property space.”</p> <p> </p> <p>Though something of a latecomer to the table, PropertyGuru has wasted no time in broadening its scope and fending off competitors, growing to become the leading player in Southeast Asia’s proptech scene. Ten years down the line, the cyber-disruptor dominates the region’s market, attracting 17 million visitors a month and 35,000 paying clients – agents and developers – and listing 1.2 million properties. In Singapore, it enjoys 85 percent of the property website market share. The company moved into Indonesia, Malaysia and Thailand in 2011; in 2016, it entered one of the fastest-growing markets, Vietnam, with minority investment in the country’s biggest real-estate website Batdongsan.</p> <p> </p> <p><a href="http://property-report.com/detail/-/blogs/of-clicks-and-mortar-talking-proptech-with-shailesh-r-7" target="_blank"><strong>More: Talking proptech with Shailesh Rao</strong></a></p> <p> </p> <p>“Each country has its own complexities and nuances,” says Krishnan. “In Singapore, agents and developers have extraordinary influence; developers route sales through agents. We partner with developers to get them to adopt digital technologies faster. In Thailand, consumers go directly to developers – it’s a very different ecosystem. Indonesia is the largest market, but the infrastructure is still developing. On the flipside, it has the most dynamic e-commerce space of all.”</p> <p> </p> <p>The company was also an early adopter of virtual reality and Microsoft’s HoloLens augmented reality software, which Krishnan explains is allowing them to help reconceptualise marketing strategies. On a more macro level, these burgeoning technologies are beginning to shape the world around us well beyond residential real estate. Just take Singapore’s market-leading CapitaLand, which builds and manages not just premium housing but also malls and offices in the city-state. Construction of its Funan project, a versatile lifestyle space slated to open in 2019 and overseen by its CapitaLand Mall Trust arm, has relied heavily on VR, with architects, structural engineers and project managers all deploying the technology. </p> <p> </p> <p>AI also features prominently in the finished version; the mixed-use complex will incorporate robotic vacuum cleaners, self-ordering food-court kiosks and a “multi-sensory” cinema. Meanwhile, marketing has moved away from traditional showrooms using physical scale-model collateral; instead, an immersive virtual-reality “simulation studio” (IVRS) has a five-wall projection system that surrounds the visitor, allowing them to explore an intensely lifelike simulacrum of the nascent attraction.</p> <p> </p> <p>“The show suite enables viewers, who don special goggles, to navigate Funan in a computer-generated world,” a CapitaLand spokesperson explains. “[It’s] a high-resolution, stereoscopic three-dimensional experience far superior to conventional videos on desktop monitors and projectors.” </p> <p><img alt="Construction of Capitaland's Funan mixed-use project in Singapore relied heavily on VR, with architects, structural engineers and project managers all deploying the technology" src="/documents/10204/0/proptech-144-image-3-compressor.jpg/9a4b5a0a-76fd-48ed-83ce-d4dcb5ea1d17?t=1516787435778" style="width: 740px; height: 432px;" /></p> <p>The company also used VR in the launch and marketing of its new lyf (pronounced “life”) brand from Ascott, CapitaLand’s serviced apartments offshoot, and brought its Travel Capsule concept to London’s St Pancras station, where travellers experienced an apartment through a headset as images of European capitals flashed across a giant screen.</p> <p> </p> <p>Global architecture firms such as Aedas – which has a portfolio that includes Singapore’s skyline-hogging icon Marina Bay Sands – has also been marketing some new projects using virtual reality, though not yet to the point where they have a bespoke team in Asia specifically charged with developing new visualisation technology. According to Bernhard Viereck, an associate at the firm who’s been exploring VR’s potential for three years, some markets are more responsive than others; in his experience, senior staff at Malaysian developers tend to be older and less inclined to trying out new toys. </p> <p> </p> <p>“They don’t like wearing the headsets,” he says. “It makes them dizzy.” Meanwhile, in Cambodia’s capital Phnom Penh – a city in a state of rapid flux that’s increasingly attractive to foreign companies – it’s a different story. Aedas’ work in the city includes Exchange Square, a landmark mixed-use collaboration with Hongkong Land that comprises offices, retail outlets and parking space, where VR has been an intrinsic part of the promotional strategy.</p> <p> </p> <p>Though its benefits are clear – particularly for younger, tech-savvy customers – bleeding-edge innovation of this sort doesn’t come cheaply. In Singapore, developers and design firms have benefited from a government agency, the Building and Construction Authority (BCA), which established an SGD800 million (USD586 million) fund to support such ventures; by end-2016 it had released SGD450 million to more than 9,000 firms to help them incorporate and implement schemes that espouse this thriving technology.</p> <p> </p> <p><a href="http://property-report.com/detail/-/blogs/8-things-we-learned-about-smart-cities-at-the-asia-real-estate-sum-12" target="_blank"><strong>More: 8 things we learned about smart cities at the Asia Real Estate Summit</strong></a></p> <p> </p> <p>With proptech on an inexorable upward trajectory, there remain certain sticking points. Just as not every consumer is tech-savvy enough to rent a home online, not every construction firm is willing to align with a VR startup of uncertain longevity. An industry as multi-faceted as property, spread across diverse, multilingual territories at different stages of development, is unlikely to find itself at the mercy of a one-size-fits-all behemoth such as Uber or Alibaba. Progress is bound to be smoother in a small, efficient country with government incentives and readily available tech – such as Singapore – than in one with a widely dispersed population and a multiplicity of private companies, such as India.</p> <p> </p> <p>“The Asia Pacific region is where proptech will make a significant leap and lead the charge, even though the United States and Europe have had a head start,” Anthony Couse, CEO of JLL Asia Pacific. The global real estate services firm recently announced the formation JLL Spark, a global business unit that will identify and deliver new technology-driven real estate services for clients. <br /> </p> <p><br /> “Some structural issues remain, of course,” he adds. “There is a smaller appetite for risk and disruption due to the infrequent nature of a property transaction as compared to something like hailing a cab or booking a hotel. The complexity of real estate, coupled with service lines going across different verticals, also makes adoption of new innovations trickier.”</p> <p> </p> <p><a href="http://property-report.com/detail/-/blogs/does-thailand-have-what-it-takes-to-be-asia-s-leader-in-innovation-district-5" target="_blank"><strong>More: Will 'innovation districts' make Thailand ASEAN's greatest startup hub?</strong></a></p> <p> </p> <p>Yet even on the subcontinent, illustrious performers have adopted proptech with manifest success. Mumbai’s Housing.com, launched in 2012, serves 40 Indian cities and has become one of the world’s top-earning home-search websites, while startups such as NoBroker (a fixed-fee agent), Livspace (an interior-design specialist) and Propstack (a real-estate analyst and marketer) have all made waves. In the absence of notable investment from overseas, Indian entrepreneurs have the green light to forge ahead in the industry.</p> <p> </p> <p>Worldwide investment figures speak to this surge in optimism for proptech: in 2015 startups in the sector attracted USD1.7 billion in funding globally, a rise of 821 percent from four years earlier, with more than a quarter of that total coming from China alone. In the first quarter of 2016, that number rocketed past USD2 billion. </p> <p> </p> <p>If 30 years ago a computer in the home was a prevalent material goal, in 2017 the tech paradigm has come full circle. Now, computers are not just determining which home we live in, but helping us build and manage it too – and it seems inevitable they’ll continue to dominate this, the world’s highest-valued asset class, for the foreseeable future.</p> <p><em>This article originally appeared in <a href="https://www.magzter.com/TH/PropertyGuru-International-(Thailand)-Co.,Ltd/Property-Report/Business/245413" target="_blank">Issue No. 144 of PropertyGuru Property Report Magazine</a> </em></p>