City&Country: Offshore-- MPI’s Singapore office to tap foreign investors

With Singaporean individual and corporate investors being the largest group of foreign investors in Malaysian real estate, it is no surprise that government-linked Malaysian Property Inc decided to set up its first overseas office in the city-state. MPI officially opened its Singapore office-cum-gallery at SGX Centre 1 on Oct 1. The office will be a launch pad to promote foreign investment in Malaysian real estate, specifically commercial and residential developments, says Thong Yaw Hong, chairman of MPI.

The office will also serve as a one-stop-shop on real estate investment-related information, from the latest Malaysian government regulations to investment policies, property valuation, taxation and infrastructure.
Personnel will also be on hand to advise foreign investors about buying property under the Malaysia My Second Home scheme. MPI has also tied up with four banks, — CIMB, Citibank, Maybank and UOB — to provide financing for Singaporean buyers.

In the last two years, there has been a signifi­cant increase in the number of investors from Singapore buying Malaysian property, notes Kumar Tharmalingam, CEO of MPI. Likewise, from 1Q2009 to 2Q2010, Malaysians overtook Indonesians as the largest group of foreign buyers in Singapore’s residential market, according to property consultant DTZ’s research.

alt“It’s a two-way street,” says Kumar, who was in Singapore recently for the launch of MPI’s office. “So, we think there’s an opportunity here for us to leverage on the relationship between the two countries by bringing properties to showcase here.” He points out that Singapore is a cosmopolitan city with a population of 5.08 million as at end-June: 3.23 million are Singaporeans, 541,000 are permanent residents and 1.31 million are foreigners. “So, more than 1.8 million of the population is made up of foreigners from all over the world, and we want to tap their funds to invest in Malaysia, especially in commercial and residential development projects,” he adds. “Singapore is a financial centre and wealth management hub, and all the funds have their Asian headquarters here and foreign high-net-worth individuals have money here too. So, it’s logical for us to set up our first [foreign direct investment] office in Singapore.”

altFor many years now, Malaysian develop­ers have held weekend property showcases in Singapore. “But, for a lot of developers, it’s on a touch-and-go basis,” observes Kumar. They can now use the MPI office in Singapore as a permanent venue to showcase their projects and to follow up on enquiries. Thus, the SGX Centre 1 office is designed with an open-plan gallery concept of 1,200 sq ft on the first level, and a mezzanine level of 1,800 sq ft with boardroom and meeting-room facilities.

Incidentally, some Malaysian developers have also set up an office and gallery in Singapore in recent years, including S P Setia, which opened one at Harbourfront Place, E&O Property along Beach Road, and Mulpha International Bhd at Goldhill Tower.

Malaysian developers have also formed joint ventures with local developers in Singapore projects. For instance, IOI Properties has tied up with Ho Bee Group to develop two luxury condominium projects at Sentosa Cove, and with listed construction group-cum-property developer KSH Holdings on the [email protected] Park residential project on Mergui Road.

Sunway Holdings has also been very active in the Singapore property development scene, tying up with Hoi Hup Realty in numerous projects, including the two HDB DBSS (Design, Build and Sell Scheme) projects City View at Boon Keng and The Peak at Toa Payoh. Most recently, the joint-venture partners started private previews for their condo project, the 473-unit Vacenza @ East at Lengkung Tujuh, adjacent to the Pan Island Expressway. Last month, HDB awarded Sunway and Hoi Hup the 290,628 sq ft, 99-year leasehold land parcel at Miltonia Close in Yishun, which the partners won with a top bid of S$165 million (RM390.3 million).

The Singapore government introduced anti-speculation measures on Aug 30, which has dampened sentiment and reduced the volume of transactions in the residential market. “The current Singapore policy is to cool the local property market,” observes K L Tan, group managing director of Sunway, who was at the MPI press conference. “Yet, it also creates a vacuum for Singaporeans to buy a second home in Malaysia.”

In fact, Singapore developers, including blue-chips such as CapitaLand, City Developments, UOL Group and Wing Tai Holdings, have projects in Malaysia. “Last week, we had an enquiry from a Singapore developer who’s developing a project in Malaysia who wants to know whether he can use our office to sell his property to Singapore buyers,” says Kumar. “We see no reason why we can’t allow that because the project is still in Malaysia.”

Cecilia Chow is editor of City & Country at The Edge Singapore

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 828, Oct 18-24, 2010

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