Stonebridge Property Group’s Asia Practice Partners Chao Zhang and Kevin Tong, spoke with WILLIAMS MEDIA, “we spent a couple of days in three cities including Hong Kong, Kuala Lumpur and Singapore. 

The purpose of the trip was to pitch a few of our larger on-market opportunities and get face time with developers, high net worth individuals, family offices and fund managers, said Chao Zhang. 

We sat down with 18 groups in total and also took the opportunity to understand more about the local market and their appetite to invest into Australia, which had mixed reviews. A short summary below:

• Hong Kong – Relatively negative outlook on the market right now with low sentiment to explore real estate investment opportunities. Local market is taking a dip and it has had an impact of the overall appetite to buy.
• Malaysia – Local market and economy is going fairly strong with many opportunities to invest locally. The margin between cost of debt and yield return makes local investment opportunities attractive, but there is still a clear appetite to look at investment options in Australia and Melbourne
• Singapore – Very hot market right now with a lot of money entering the country, and a surge in the number of family offices being set up over the last 5 years. Australia is an important investment destination, but other attractive regions to invest also include locally, Japan and Thailand.

Overall, the sentiment in Malaysia and Singapore is strong and the local economy and property markets are on the rise, which has been very positive and refreshing to see, commented Mr Kevin Tong. 

It has been great for us to get a genuine feel of how the market is tracking over there and talk to the active buyers. The fact that we are getting quality face time with the buyers over in Asia is a big benefit for our team and the properties we are promoting. It will definitely increases the chances of them engaging and spending time to review the opportunities we put forward to them in future.

Chao and Kevin shared with WILLIAMS MEDIA their insights into the local markets that they visited.

Overall, the sentiment in Malaysia and Singapore is strong and the local economy and property markets are on the rise, which has been very positive and refreshing to see.

There are good buying opportunities locally for both Singapore and Malaysia. Malaysia has an attract margin between yields (approx. 6%-8%) and cost of debt (approx. 4%). Singapore has much lower yields but continued anticipation for capital growth, as has been the case over the last 20 years.

The foreign investment market for residential property in Singapore has been so hot, the government recently introduced a new stamp duty hike to 60% for foreign investors for residential real estate, with the intention to deter foreign investment. This may also drive foreign investors to consider commercial investments in SG as well.

Family offices have been a big driver of money going into Singapore. We have heard the number of family offices have increased in numbers significantly from approx. 200 to 1,200+ family offices in the last 5 years

Currency rate and weaker Australian dollar have also made Australian investments much more attractive. SG to AUD now at 1.15. historically usually 1-1

Australia is still a very attractive destination overall for investors and is always monitored by fund managers and private investors. The desire to continue to invest into Australia is driven by the country being seen as a safe destination to park capital, there being a minimal time difference between other Asian countries, and also the fact that many buyers already have existing investments and knowledge in the Australian and marketplace. The weaker Australian Dollar and current currency conversion advantages are also making it even more attractive to consider buying in Australia right now.

Other investment destinations are also being considered. Many groups have mentioned Japan because of the spread between yield and cost of debt. 

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