Asia-Pacific saw almost US$2.1 trillion invested in residential land sites in 2016, with about 11 percent originating from cross-border deals, showed a Knight Frank report.
Notably, cross-border residential land investment activity within the region rose 136.9 percent over the past decade to over US$42 billion in 2016, with developers from Hong Kong and China accounting for majority of the cross-border capital.
On the surface, Hong Kong developers appear to be the front-runner as it accounted for “74.5 percent of the market share but in fact the most acquisitive companies have roots in mainland”.
This comes as three out of five most aggressive overseas housing developers in Hong Kong are subsidiaries of Chinese state-owned companies.
Knight Frank revealed that the growth in outbound activity by mainland Chinese developers has been “one of the key trends over the past decade, with volumes going from practically zero in 2009 to more than US$2.5 billion in 2016”.
Meanwhile, Singapore-based developers followed Hong Kong, accounting for 7.3 percent of the total cross border volume.
“Against the triple whammy of private home declines, property cooling measures and rising land prices back home, more Singapore-based developers have invested offshore to mainly gateway cities to pursue residential development opportunities,” said Knight Frank Singapore consultancy & research head Alice Tan.
“That said, the allure of investing in Singapore residential market remains intact especially from smaller local developers and foreign investors, as exhibited from the strong bidding interest for government land sale sites for the past two quarters.”
Along with the emerging signs of recovery, Tan expects competition for residential site to increase, potentially “prompting the unwinding of government land sale supply and spurring collective sale activities”.
This article was edited by Denise Djong.