Singapore investors snap up US$5 billion of China's commercial properties, brushing aside trade war concerns

By Daniel Ren ren.wei@scmp.com / SCMP | June 18, 2019 1:52 PM SGT
Singapore's investors made a strong comeback to China's property market, becoming the biggest group of asset buyers in the country even as a trade war rages on with the United States, and threatens to spill over into an assault on Chinese technology.
Real estate investments by institutions and individuals from the Southeast Asian city state rose to 34.65 billion yuan (US$5 billion) last year, or 42 per cent of total spending by global capital in China, according to data by real estate agency Cushman & Wakefield.
"Asian investors, particularly those from Singapore, have the know-how and rich experience in China's property market," said Alvin Yip, head of Cushman & Wakefield's capital markets for Greater China. "They hold a long-term view on the Chinese market and they are unlikely to be deterred from pursuing solid assets by the trade war."
The asset buying spree by Singaporeans is likely to set the tone for other global investors as they assess whether rising geopolitical risks would erode the attractiveness and potential returns in the world's most populous market and fastest-growing middle class. Singapore investors, among the first to set foot in China when the economy opened its doors to global capital in the late 1970s, are often seen as trailblazers among international investors in the country.
Singapore's largest developer CapitaLand paid 12.8 billion yuan last November for the Star Harbour International Centre on the north bund of Shanghai's Huangpu River, in what was the largest single foreign purchase of Chinese real estate. Singapore's Government Investment Corporation (GIC), the country's sovereign wealth fund manager, contributed to half the purchase.
The project includes a pair of 50-storey grade A office towers, and a seven-storey retail mall which has been turned into CapitaLand's third Raffles City shopping centre in China's commercial capital.
"We will continue to be a net asset buyer in China," said Puah Tze Shyang, chief investment officer of CapitaLand China. "The trade war could have an impact on China's economic growth, but we are still bullish on the market."
CapitaLand had been investing in China for 30 years. The developer, backed by Temasek Holdings, also spent 5.7 billion yuan to buy a mixed-use project in Chongqing called Liangjiang Chunchen last year. In January, CapitaLand paid 1.37 billion yuan for Pufa Tower in Shanghai.
CapitaLand bought Pufa Tower in Shanghai for 1.37 billion yuan. Photo: Handout