China a draw for residential investments
Investors looking to snap up residential development sites in Asia-Pacific are increasingly setting their sights on China, said a new report.
It noted that in the first quarter of this year, 88 per cent of investments in residential sites from Singapore flowed into China.
A similar trend was observed last year, where 86 per cent out of the US$3.03 billion (S$4.19 billion) of investments in Asia-Pacific residential land from Singapore went into China, said the report by property firm Knight Frank.
Mr Nicholas Holt, head of research for Asia-Pacific at Knight Frank, said that while the size of the Chinese market, geographic proximity and cultural similarities have attracted Singapore investors, a large part of the investment can be attributed to companies or developers that have origins in China but are based elsewhere.
The region saw an overall increase in cross-border residential land investment activity, which rose around 137 per cent over the last decade, from US$17.8 billion in 2007 to US$42 billion last year.
Ms Alice Tan, director and head of consultancy and research at Knight Frank, said: "Singapore-based developers, cognisant of the growing tide of overseas prospects in the longer term, are stepping up to look outward for lower-cost assets."
She added that cities such as London, Sydney, Melbourne, as well as emerging markets like Vietnam and Malaysia, are countries investors are considering.
Local factors also posed as significant bugbears for developers looking to take up projects here, said the report.
These include cooling measures and the five-year project completion deadline for residential projects.
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