Agence France Presse reports that Singapore’s residential property prices rose by 10% in 2006 and that rents have risen by a truly extraordinary 100% in 2007 so far. That rentals are increasing steeply is confirmed by other sources (http://lushhome.wordpress.com/2007/04/) and there is evidence to suggest that the government is just as surprised at the change as everyone else appears to be. However, we’ve found no confirmation of AFP’s 100% increase statistic, yet. Data to hand suggests that rental yields have normally been in the region of 3.5% maximum for a number of years. Given that interest rates on savings in Singapore are less than 1% pa (www.singstat.gov.sg/Keystats/mqstats/ess/essa51.pdf ), property would still seem to be an attractive investment but, as borrowing rates are considerably higher (prime lending rate is 5.33%), any kind of gearing for property investments would be heavily dependent upon prices of assets rising to be economic. Mortgage rates are lower with fixed rate mortgages available at 3.75% and floating rate ones available at 3.4% (with even more favourable terms for one to three year terms. With the increase rental yields in the first half of 2007 the economics of property investment in Singapore are seeing a sea-change.
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Tags: singapore+property+market
Lacking the huge natural resources of Abu Dhabi or the world class infrastructure of Dubai, the smaller members of the United Arab Emirates do have developmental advantages of their own in terms of geographic location and tourist potential.
Ras al Khaimah (population 205,000), the northernmost of the emirates, close by the Omani enclave, reported investment of Dh 100bn in 2006 (approximately $25bn) with the tourism and real estate sectors being particularly active. However, the emirate’s economic plans place industrial development in the key position.
Fujairah (pop. 127,000) has the advantage of being the only UAE port outside the Persian Gulf. Strategic facilities are being constructed to take advantage of this, anticipating any military or naval action that could close the Straits of Hormuz at the mouth of the gulf. These include an oil pipeline from Abu Dhabi and a liquefied natural gas (LNG) storage hub.The latter is a project being undertaken by Dubai Multi Commodities Centre in conjunction with LNG Impel, part of Galveston LNG of Canada. The go-ahead for this important project, representing a capital outlay of Dh 8bn, is contingent on arrangements for Qatar to use the facility. The Fujairah authorities have plans to reclaim two square km from the Arabian Sea for the project.
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Tags: UAE, Fujairah, Ras+Al+Khaimah, Dubai, Fujairah, Ajman
Morgan Stanley’s MSREF VI fund has collected $8bn. This total will be leveraged up to in excess of $30bn to make property investments around the world but with a heavy emphasis on the Japanese market (50%) and emerging markets (25%). However, Reuters report that 30% of the fund is earmarked for Europe and 60% for Asia, which would appear not to allow as much for the Chinese and Indian markets as other reports are hinting. The MSREF series of funds currently have real estate assets worth $83.5bn and $31.6bn under management. The new fund is intended to have a return of 20% a year, in line with Morgan Stanley’s overall success with these types of fund since 1991. To date 45% of the MSREF VI funds are reported to be committed, including the $2.4bn purchase of 12 hotels and two property management units from All Nippon Airways. It is not apparent to what extent MSREF VI will be buying up portfolios of non-performing loans in its target market, one of its customary investment strategies.
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Tags: property+funds, morgan+stanley, MSREF+VI
Colliers International office in Belgrade has reported sharp increases in the cost of properties in the Montenegrin coastal districts. In the list of resorts with prices in the 2500 to 5000 Euro range are Bar, Hercog Novi, Tivat and Ulcinj, while the report implies that prices in Budva, Petrovac and Sveti Stefan are higher still.
A key consideration has to be the stability of this part of South Eastern Europe. Montenegro shares frontiers with Albania, Kosovo and Bosnia Hercegovina and this latest phase of the country’s independent existence dates back only 12 months. To put this in some sort of context; how many of the investors in properties in Tallinn or Riga would have been prepared to commit themselves as far back as 1992? Montenegro’s economy suffered from being tied to Serbia’s in the 1990s – an important factor in the move to independence – and the country has a low GDP (at $2.27bn considerably less than the last year’s profits for Tesco) and high levels of poverty. For foreign investors the factors in its favour are natural beauty, closeness to Western Europe and the use of the Euro.
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While the continued upward path of the Shanghai stock market has featured regularly in the world’s media, the city’s real estate market has not received so much attention. Nevertheless, property in China’s largest city is undoubtedly part of the boom and the web of economic dilemmas facing the Chinese authorities.
The latest efforts to curb real estate speculation have resulted in the introduction of a 20% tax on second-hand property sales. One explanation given for the increase is the authorities’ desire to prevent a speculative bubble in real estate fuelled by profits from the stock market. Another, more plausible reason is that the lure of the stock market is so great that people are selling property in order to finance speculative investments. This tax hike should certainly be seen in the context of Prime Minister Wen Jiabao’s general efforts to decelerate the juggernaut of the Chinese economy.
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Tags: china, shanghai, real+estate
Friday, June 29th, 2007 
Posted by Overseas Property Mall in 
