Property firms look abroad to escape curbs

SHOPPING SPREE: After buying a 40,489 sq ft site in Melbourne, Hiap Hoe went on to snap up a commercial building at 380 Lonsdale Street and a retail and office property at 206 Bourke Street (above). The acquisitions cost the company close to $200 million.


    Feb 04, 2014

    Property firms look abroad to escape curbs

    FIRMS have ramped up their geographical diversification efforts in recent months in a bid to escape Singapore's prohibitive property cooling measures.

    In the opening weeks of last month alone, Aspial Corporation unveiled two acquisitions in Australia, Keppel Land agreed to purchase land in Indonesia, and CapitaLand picked up yet another plot in China.

    Australia, Britain and the United States have been firms' favourite hot spots. Several companies, including Hiap Hoe, AIMS AMP Capital Industrial Reit, Aspial, and Suntec Reit, picked Australia for their first overseas acquisitions.

    Hiap Hoe, for instance, bought a 40,489 sq ft site in Melbourne, which it intends to develop into a 425-unit project, and then went on quickly to snap up a commercial building at 380 Lonsdale Street and a retail and office property at 206 Bourke Street. The three acquisitions cost the company about A$177.6 million (S$198.4 million).

    Aspial bought a freehold commercial building in Melbourne for A$41.5 million, followed soon by a separate commercial building, also in Melbourne, for A$42.3 million. It intends to redevelop the latter site into what will be the tallest building in the city, subject to aviation clearance.

    Among real-estate investment trusts (Reits), AMP Capital picked up a 49 per cent stake in Optus Centre, a business park in Sydney, for A$184.4 million, while Suntec Reit bought 177-199 Pacific Highway, a freehold land and property with a 31-storey Grade A commercial tower that is targeted for completion in early 2016. These were the first overseas acquisitions for both Reits.

    According to data released by DTZ, close to US$3.5 billion (S$4.5 billion) was invested overseas by Singapore-based investors in the first nine months of last year.

    Notably, this figure does not take into account GIC's 50 per cent stake in London's Broadgate business district, a retail and commercial estate of 17 office buildings.

    While the consideration for GIC's purchase was not disclosed, reports placed the price tag at around £1.7 billion (S$3.6 billion) - believed to be a record for a central London property.

    City Developments Limited (CDL) and Oxley Holdings are among the firms that made forays into the London market in the last 12 months - CDL via a freehold plot near Harrods in Knightsbridge, which it intends to redevelop, and Oxley Holdings via a mixed-development site at London's Royal Wharf.

    Other firms also entered the fray. Local construction group Lum Chang added a London hotel near the tourist attractions of Hyde Park and Kensington Gardens to its growing list of London properties last year.

    Property in the US also received its fair share of interest. SingHaiyi group - previously known as SingXpress Land - snapped up two distressed commercial projects in the US in the last few months, after Mr Neil Bush, the brother of former US president George W. Bush, was brought on board as non-executive chairman of SingHaiyi.

    Separately, OUE picked up California's tallest building - the US Bank Tower in Los Angeles - for US$367.5 million, while earlier this year GIC sealed a deal to buy office space in New York's Time Warner Centre with two partners, the Abu Dhabi Investment Authority and US real-estate firm Related Companies, for US$1.3 billion.

    While many local firms have been acquiring plots overseas, one of the most active is local developer Oxley Holdings, which now has ventures in Malaysia, Cambodia and China.

    Following its first move abroad in May last year, in which it bought a firm with rights to a mixed-use site in Kuala Lumpur, Oxley Holdings has assembled an impressive portfolio of plots through a combination of joint ventures, development right agreements, and acquisitions.

    Last month, the group said it signed a framework agreement with Sepang Goldcoast and Sepang Bay to develop land. The latter two hold interests in two parcels of 99-year-leasehold land with an aggregate area of about 47.3ha in Sepang.

    The joint-venture agreements entitle Oxley Treasure to 85 per cent of the gross development value of the developments on the land.