The president and chief executive of CapitaLand, South-east Asia’s largest listed developer, said yesterday that demand for residential properties in China remains strong, although prices might drop slightly in certain regions.
Mr Liew Mun Leong also said the group intends to expand its shopping mall portfolio in China to capitalise on strong consumer demand.
China’s efforts to cool its property market have shown modest signs of success, with housing transactions falling for the first time in three months in October by 25 per cent from September.
However, with about 5,000 residential units set for development in second-tier Wuhan city over the next few years, Mr Liew said he does not expect prices to drop too sharply in China, which makes up about S$10 billion, or 36 per cent, of CapitaLand’s portfolio.
Prices will certainly be adjusted downwards, Mr Liew said. However, “China is a big continental economy. You have the coastal cities. And you have the second-tier, third tier cities – it will vary. I don’t imagine it will be so steep”.
Mr Liew did not say how much he expects housing prices to drop by, but reiterated that real housing demand in China – which excludes speculative buying – remains very strong.
The company is also exploring expanding its shopping mall portfolio to boost revenue.
“(It) is very promising simply because consumption in China must grow. So shopping malls, if you ask me, are a top priority,” he said.
“There are very few developers in China who have the competency to build shopping malls, because you need to locate the right place, you need to design it well, and you need be able to fill it up. So in terms of competition, shopping malls are something we have a high edge on.”
In Singapore, Mr Liew said the company will launch the 99-year leasehold Bedok Residences by the end of the year, despite slowing demand here.
“It is in a strategically good location, and I expect good demand for this,” said Mr Liew.
Source : Today – 18 Nov 2011