HONG KONG: A slowdown in domestic demand for homes in the US and Europe is prompting property developers there to search for buyers in Asia, particularly in Hong Kong and on the mainland.
The address list of foreign cities that find favour among Asian buyers includes London, Sydney and Singapore. More recently, it has expanded to Europe, particularly in Italy.
"Italy is a pretty new market to Hong Kong and mainland buyers," said Jacopo Mazzei, the chief executive of RDM Fingen, a real estate group based in Florence.
"But Asia is the upcoming part of the world. Europe must be open to Asians."
RDM Fingen, together with J Byrne Murphy, a principal of Washington-based real estate group Kitebrook Partners, is launching its Florence residential development Palazzo Tornabuoni in Hong Kong for the first time ever.
Mazzei said western European markets formerly targeted wealthy Americans and Europeans buyers. But the buying power of this target group had been weakening over the two years since the outbreak of the global financial crisis.
The sovereign debt crisis in Greece had, meanwhile, added to the uncertainties over the economic outlook in western Europe, he said.
Darien Bradshaw, a regional director at property consultancy Colliers International, agreed that more overseas developers were launching their properties in Hong Kong.
"There is an increasing number of developers in London who are trying to enter the market here," Bradshaw said. "They are prompted by the weak currency, the stabilisation of property prices in the last year after a correction from the peak of April 2007, and strong demand from Asian buyers over the past nine months."
Colliers, which concentrates on the London market, said UK developers' interest in Hong Kong had increased since the second half of last year.
Twelve projects, arranged by Colliers, have been launched in Hong Kong so far this year, compared with just three over the same period last year, and 21 for all of last year.
Chua Chor Hoon, the head of Southeast Asia research at consultancy DTZ, expects to see more international properties including from Europe being launched in Hong Kong.
DTZ is launching two Singapore residential projects in Hong Kong. Chua believes that Hong Kong and mainland investors retained an interest in Singapore properties because of the city-state's political stability and strong fundamentals.
Nicholas Brooke, the chairman of the Professional Property Services Group, said buyers considering the European market should take into account the credit crisis in Greece.
"Investors are going to be very wary about any investment in Europe for some time to come," Brooke said.
However, he said the economic signals from the US were becoming more positive and there was growing evidence that values and yields in the commercial sector had stabilised.
"I would therefore expect to see those investors who operate cross-border to start again to consider strategic acquisitions on the US west and east coasts," Brooke said.
According to Mazzei, there are 38 Palazzo Tornabuoni apartments on offer, with 18 offered for whole ownership and 20 for shared ownership.
Sizes vary from studios of 700 sq ft net floor area to 1 and 3-bedroom units ranging from 540 to 1,990 sq ft.
Prices for whole ownership start at €1 million (RM4.09 million), rising to €5 million or above. Prices for shared ownership range from €245,000 to €575,000.
One apartment can have a maximum of eight owners.
So far one unit has been sold during the Hong Kong launch.
Kenneth Li, the son of the Hong Kong buyer, said the purchase was prompted by the culture of the city.
"Florence is one of the most important cultural cities in the world. When you buy into the Palazzo, I really believe you are buying into Florence," Li said.
His family bought a 915 sq ft unit.
"For us, it is both an investment and for personal use. Located in the heart of the [central business district] in Florence, it will certainly be a good investment over time," Li said. – South China Morning Post
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