More foreign developers taking on red-hot S’pore market

Packed showflats and brisk sales — Japanese developer Sekisui House said the hot demand for property in Singapore has helped to boost its revenue.

It hopes to increase the revenue contribution from its overseas markets to 10 per cent in the short-term. It is currently developing projects in Singapore, China, the United States and Australia.

Kenta Konishi, managing director of Sekisui House Singapore, said: “Why we are focusing on overseas market is that Japan is facing population decline and the economy is stable, but not going up. So we need some opportunity to go overseas to cover the Japanese sales and revenue. We looked at the markets and Singapore was one with good market conditions.”

Sekisui House is jointly developing several projects in Singapore with its partners Frasers Centrepoint and Far East Organization. They include QBay Residences in Tampines, Watertown in Punggol and eCO at Bedok South.

Frasers Centrepoint and Far East Organization said the partnership enabled them to tap into the network and extensive building expertise of Sekisui House. It also provided fresh perspectives which allowed the three developers to introduce more innovative concepts and features to their developments, which will in turn benefit buyers.

Meanwhile, Singapore developer Keppel Land said it has been able to tap best practices from foreign partners in their joint venture projects, such as Bugis Junction and One Raffles Quay.

Recently, it has joined hands with China VANKE, the largest residential property developer in China, to develop a condominium project in Tanah Merah.

Tan Swee Yiow, president (Singapore) at Keppel Land, said: “The collaboration is really an opportunity for us to leverage on their strong local knowledge and extensive network in China and hopefully, that would help us to enhance our presence in high growth cities in China. We would like to learn the best practices in china and hopefully we can also tap on their large customer base, especially for those customers who want to have properties in Singapore.”

China VANKE told Channel NewsAsia that it is drawn to the mature property sector in Singapore and it is keen to learn about project development and management.

In recent years, analysts said there has also been more foreign developers, especially from China, in the mass market and executive condominium segments.

Some analysts said foreign developers have delivered some good quality residential projects over the years, and provided creative ideas in terms of space utilisation, for instance. However, there is also a concern that having too many foreign developers in the market will push up land cost.

Ku Swee Yong, CEO of International Property Advisor, said: “Land is a finite resource. We actually see the more players there are, the more land prices will be ‘bidded’ up. So the basic cost of any projects would go up the more players bid for the projects.”

For instance, China’s Qingjian Realty (South Pacific) Group put up the highest bid of S$216 million for an executive condominium site in Woodlands. That is about nine per cent above the second highest bid by Bellevue Properties, a unit linked to City Development.

Source : Channel NewsAsia – 14 May 2013

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