Where are the real estate investment hotspots?

Attendees of Vietnamese developer Dat Xanh Mien Trung’s presentation of his Regal Land mixed-use development in Quang Binh province at Space Furniture Asia Hub last Friday (Photo: Samuel Isaac Chua/EdgeProp Singapore)

SINGAPORE (EDGEPROP) – With inflation soaring, more and more investors are looking for cover in property investments, especially sheltered from the housing market. In Singapore, private house prices jumped 3.5% QoQ in 2Q2022, driven by the launch of two major projects this quarter, namely Piccadilly Grand and [email protected] Both projects launched in May and sold over 70% of their units on the first day of launch.

This was followed by the launch of the 372-unit Amo Residence at Ang Mo Kio Avenue 1. Jointly developed by UOL Group, Singapore Land Group and Kheng Leong Co, the project was 98.1% sold on the first day of launch July 23. It set a new benchmark for pricing in the Outer Center region, with the average sale price reaching $2,100 per square foot.

These sales were made despite rising interest rates and the fact that Singapore has one of the strictest household borrowing limits in the world. « Resistance tests by MAS [the Monetary Authority of Singapore] suggest that most households should be able to service their debts even under scenarios of sharp interest rate hikes and significant income losses,” said Ravi Menon, Managing Director of MAS, during the unveiling of the central bank’s FY2021/2022 annual report on July 19.

Singaporeans are already traveling abroad armed with “one of the most powerful passports in the world”, according to the Henley Passport Index 3Q2022 global ranking, by investment migration consultancy Henley & Partners. Singaporeans, like Chinese and Hong Kongers, tend to “travel and view properties at the same time,” says Chua Shir Yee, JLL’s international residential sales manager in Singapore.

What are the options?

The Esse Sukhumvit 36, a freehold luxury condo development by a joint venture between Singha Estate and Hongkong Land (Photo: SOM)

Bangkok, Thailand

Bangkok was a popular vacation destination among Singaporeans before the pandemic, with some buying a vacation home or investment property.

In 1Q2022, the luxury apartment market in Bangkok partially recovered on the back of investor demand, especially for rental properties, says Jeremy O’Sullivan, head of JLL Thailand research, in an update of the 1Q2022 market.

New supply of luxury condominiums was scarce, due to the uncertainty surrounding the pandemic. For investors looking for a high-end development in Bangkok, there is The Esse Sukhumvit 36, a freehold luxury condo development by a joint venture between Singha Estate and Hongkong Land.

Singapore-listed property developer Tuan Sing Holdings has invested in the development of its planned township, Opus Bay in Bataom (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Batam, Indonesia

Before the pandemic, Batam was popular among Singaporeans for its wellness spas, from manicures and pedicures to massages. And for others, it’s seafood and shopping.

During the pandemic, despite declining tourist numbers due to border restrictions, Batam’s residential real estate market has proven resilient, with stable prices.

According to the country’s central bank, Bank Indonesia, average property prices in Indonesia fell by 0.2% over the whole of 2021, and in 1Q2022, residential prices increased slightly by 0.1% in year-on-year.

A major player in Batam is Singapore-listed property developer Tuan Sing Holdings, which has invested in the development of its planned township, Opus Bay.

Am Tacheles, a mixed-use development planned by Swiss architectural firm Herzog & de Meuron in Berlin (Picture: JLL)

Berlin, Germany

In addition to sampling craft beer, those traveling to Berlin can soak up the culture and history of the German capital. Over the past decade, Berlin has become a popular destination for start-ups and tech companies. This led to a booming economy and population growth.

The result is a shortage of new apartments in Berlin. According to JLL Research, 20,700 new apartments are needed every year in Berlin. There are 250,000 apartments missing in the capital in September 2021, with a vacancy rate of 0.9%.

Berlin’s population in 2022 is 3.57 million, while home ownership hovers at 18%, compared to the country as a whole, which has a homeownership rate of 50.4% in 2021.

Discover a new urban district in the center of Berlin, Am Tacheles, a mixed-use development planned by Swiss architectural firm Herzog & de Meuron. AM Tacheles stands on the site of the former Kunsthaus Tacheles arts center, a monument of cultural significance.

Already, the real estate market in the state capital, Johor Bahru, is seeing an increase in activity (Photo: Bloomberg)

Johor Bahru, Malaysia

Just across the border from Singapore is Johor Bahru (pictured below), the capital of Johor, Malaysia’s southernmost state. Before the pandemic, many commuted daily between the two cities.

The lifting of overland travel restrictions between Malaysia and Singapore since April 1 has led to an increase in the number of travelers at both Woodlands and Tuas checkpoints. The number hit a record 282,000 travelers per day during the recent Hari Raya Haji weekend from July 1-3.

The return of visitors from Singapore to Johor, along with the broader easing of pandemic-related security measures, is expected to revive various sectors such as retail, tourism and hospitality. This, in turn, will bring improvement to the real estate market as sentiment improves.

After a pandemic-induced lull, real estate prices in Johor are expected to rise gradually this year. Already, the real estate market in the state capital, Johor Bahru, is seeing an increase in activity. To Setia Sky 88a freehold condominium in the city by Malaysian developer SP Setia, interest has increased significantly from local and Singaporean buyers.

The 15ha MediaCityUK, located on the banks of the Manchester Ship Canal at Salford Quays in Greater Manchester (Picture: MediaCityUK website)

Manchester, United Kingdom

Manchester is famous for its two football clubs (Manchester City and Manchester United), its museums and culture, and its history as ‘Cottonopolis’, once the world’s largest center for the cotton and textile industry. It is now the second largest city in the UK after London.

Apart from its Victorian structures, Manchester has some of the most avant-garde architecture. It is home to the second largest media center outside of London: the 15 ha MediaCityUKlocated on the banks of the Manchester Ship Canal at Salford Quays in Greater Manchester.

According to the JLL Cities Index, housing rents in Manchester have increased by 58% over the past 10 years. Meanwhile, house prices in Manchester have risen 233% over the past 20 years, even outpacing London’s 198% growth over the same period, says JLL.

The latest residential development to be launched in Manchester’s MediaCityUK is High Definition. The 280-unit apartment development was launched in March this year and is expected to launch in Singapore during Q3 2022.

Artist’s impression of The Velaris Residences, a joint venture project between Hongkong Land and Robinson Land, in Bridgetowne, a township between Pasig City and Quezon City (Photo: RHK Land)

Manila, Philippines

A wave of optimism has swept through the Philippines as its economy is expected to recover strongly from the pandemic. This bodes well for the residential real estate sector, especially in the key market of Metro Manila. With more companies inviting their employees back to the office, demand for condominiums in Metro Manila is gaining momentum, according to a report by Cushman & Wakefield Philippines.

According to Cushman & Wakefield, overseas buyers keen to capitalize on the economic and real estate market rebound should stick to buying properties from proven developers.

The main real estate developers established in the Philippines are Hongkong Land and Robinsons Land. Their joint venture, RHK Land Corp, is developing a luxury residential condominium project called Velaris Residences in Bridgetowne, a township located between Pasig City and Quezon City.

Regal Legend, an ambitious urban complex on a 21 ha site in Dong Hoi, the capital of Quang Binh province in Vietnam by Vietnamese developer Dat Xanh Mien Trung Group (Photo: Dat Xanh Mien Trung)

Quang Binh Province, Vietnam

For those who want to visit natural parks and a Unesco World Heritage Site in Vietnam, Quang Binh Province would be worth considering. It has many natural attractions, the most famous being its caves (404 in total), mountains and white sand beaches. The most famous of its caves are Phong Nha Cave and Paradise Cave, as well as Son Doong Cave, the largest cave in the world. They are located in Phong Nha-Ke Bang National Park, a Unesco World Heritage Site.

However, Quang Binh lacks luxury accommodation, facilities and infrastructure worthy of an international tourist attraction, according to Vietnamese developer Dat Xanth Mien Trung (DXMT).

DXMT invests 10 trillion VND ($594.1 million) in royal legendan ambitious urban complex on a 21ha site in Dong Hoi, the capital of Quang Binh province.

House prices in Tokyo rose at a CAGR of 5.6% between 2014 and 2021, according to JLL (Photo: Bloomberg)

Tokyo, Japan

Japan is a favorite vacation destination for Singaporeans. And when it comes to buying an investment property, many have focused on the capital, Tokyo.

According to JLL Research, Tokyo house prices rose at a CAGR of 5.6% between 2014 and 2021. Even at the height of the pandemic, prices remained resilient, rising 14.2% in 2020.

While the pandemic has caused the city’s population growth to slow – as border closures and lockdowns have restricted movement and migration – a rebound is expected as Japan reopens.

Check out the latest listings near Piccadilly Grand, [email protected], Amo Residence

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