Chengdu draws S’pore developers

The pace of China’s economic growth has eased markedly but investment interest in the country, especially in second-tier cities such as Chengdu, by investors from Singapore appears to have waned little.

Take Frasers Hospitality, the serviced apartment arm of conglomerate, Fraser & Neave, for instance. It is already looking for a second and perhaps even a third property following the official opening last month of its first block of apartments in Chengdu, the capital of Sichuan province and its largest city. The metropolis has a city population of over seven million and another seven million in its surrounding areas.

According to the Sichuan Department of Commerce, there were cumulatively 447 projects by Singapore companies in the province as at the end of last year, of which 282 were in the capital itself.

The investments are varied and span a number of sectors, with real estate pulling in the most in terms of value. Major property players include CapitaLand, Keppel Land as well as Surbana – a joint venture between Temasek Holdings with 60 per cent and CapitaLand with 40 per cent. And the Hong Leong Group’s Millennium Hotels operates the Millennium Chengdu.

In education, there are the likes of Eton House and NTUC Learning Hub. In other sectors, there are players from here such as Broadway and Hi-P.

In fact, you can live your life in Chengdu just on the companies from Singapore.

You can live in homes built or managed by the developers mentioned above. You can have a meal at Sakae Sushi, buy bread at Breadtalk, enjoy bakwa at Bee Cheng Hiang. You can do your finances at the branches of United Overseas Bank, OCBC Bank and GE Credit. And you can travel on buses or taxis owned and run by ComfortDelGro. Indeed, ComfortDelGro is the second biggest cab operator in Chengdu with over 1,000 taxis.

And for good measure, ST Electronics is involved in putting up traffic management controls and electronic signboards throughout the city.

Mr Lee Yi Shyan, Minister of State for Trade & Industry and National Development, thinks opportunities for Singaporean companies still abound in Chengdu.

“This city is not only the gateway for south-western China but also one of the fastest growing in terms of wealth,” he said.

In fact, it was Mr Lee who decided to set up a trade office in the city when he headed International Enterprise Singapore.

“I first visited the city in 2001 and the following year we set up the office,” he said.

It is not for nothing that the fertile Chengdu Plain on which the city stands is also known as the “Country of Heaven” or “The Land of Abundance”.

According to the 2007 Public Appraisal for Best Chinese Cities for Investment, Chengdu was chosen as one of the top 10 cities to invest in out of a total of 280 urban centres in China. It was recently named the country’s fourth most livable city by China Daily.

Although property prices have dipped quite a bit – some say over 15 per cent since the Chinese government put the squeeze on speculative purchases – Singapore investors seem unperturbed, at least in public.

Frasers chief executive Choe Peng Sum said the opening of Fraser Suites Chengdu “is also a clear reflection of the confidence we have in China’s dynamic growth, which we are very excited to be a part of.

“Our strategy will be to continue to strengthen our presence across China to meet the demand for premier international serviced residences, both in primary as well as burgeoning secondary high-growth cities like Chengdu, where foreign direct investment and tourism are expected to increase exponentially in the next few years.”

Making an even bolder bet on Chengdu is CapitaLand, which has poured billions into residential and other projects in the city. By the end of next year, the developer will have five malls in the city, including Raffles City Chengdu that will comprise a retail mall, an office tower and a five-star hotel or serviced residence.

Chengdu is also the site of Surbana and Keppel Land’s first joint township development, The Botanica, which is located on a massive 65-hectare site. To date, more than 7,000 residential units have been sold at The Botanica. Surbana, which describes itself as builder of mid-level homes, has five projects in Chengdu with a potential yield of 57,000 housing units.

And last November, the Hong Leong Group through its subsidiary, First Sponsor Capital, successfully tendered for two land parcels totalling 270,500 sq m in Chengdu at a net cost of about US$130 million (S$163 million). The sites will be developed into a mixed residential and commercial development, which will include a hotel and convention centre. Meanwhile, former Labour Permanent Secretary Han Cheng Fong, who was also formerly the chief executive of DBS Land and then Fraser & Neave, has embarked on a S$500-million real estate project in a joint venture with a Hong-Kong based Chinese lady whom he has declined to name. The mixed development comprising office, shopping and hotel complexes is expected to be completed next year.

Source : Today – 20 Apr 2012