Where to invest in Asia ‘09
To really cash in on property abroad, you have to stay ahead of the pack. There’s always a little risk involved but there are definitely some emerging markets in Asia worth keeping an eye on, says Lucy Davis
"In Price Waterhouse Coopers’ Emerging Trends in Real Estate 2009 Asia Pacific report, Ho Chi Minh City comes out on top as the best place to buy residential units in the region"
As the value of stocks and shares continues to plummet on the global financial markets, investing in real estate increasingly looks like the safer bet, and Asia has several up-and-coming opportunities for 2009.
In Price Waterhouse Coopers’ Emerging Trends in Real Estate 2009 Asia Pacific report, Ho Chi Minh City comes out on top as the best place to buy residential units in the region, and from 2008 to 2012, over 3,000 apartments will come onto the market with a collective floor space of 340,000 square feet. At over 9 percent, yields in Ho Chi Minh City are considerably higher than in the Vietnamese capital of Hanoi, where they currently stand at around 7 percent.
Tim Murphy, Managing Director of Hong Kong-based real-estate company IP Global, says, “Vietnam’s economy took a tumble in 2008 but, with a young and growing population, the country’s demographics remain strong. In the property realm, there has been rapid urbanisation over recent years and demand now heavily outweighs supply. The infancy of Vietnam’s mortgage market also weighs in the country’s favour in these turbulent times.”
The company currently has one property available in Ho Chi Minh City, Hung Vuong Plaza, which is based in Cho Lon (China Town), one of the city’s most affluent districts. All the apartments in this plaza - the largest (30-storey) first-class complex in Ho Chi Minh City - have three bedrooms, and prices start at HK$1.67 million for the smallest property, sized at 1,300 square foot. The company offers a guaranteed fixed return at 6.5 percent gross per annum for two years.
At The Manor, another up-and-coming luxury apartment block in Ho Chi Minh City, a three-bedroom, 2,055 square-foot apartment will set you back HK$5.8 million. Overlooking the Saigon river, the luxurious units are popular with expatriates and the city’s affluent young professionals alike.
Another Asian city that Murphy believes has investment potential is Kuala Lumpur, and while oversupply is admittedly something to be aware of, the government remains confident that its lenient property laws will continue to attract overseas investors. Small-sized apartments offer the highest yields - 9 percent for a 1,291 square-foot property.
“Malaysia’s diverse economy seems to be weathering the global financial storm with GDP forecast at 3.5 percent for 2009,” says Murphy. “With a productive labour force and a government intent on encouraging foreign investment, Malaysia looks set to remain South East Asia’s third largest economy.”
If you’re keen to invest in Kuala Lumpur, then why not consider Kiara 3, which is scheduled for completion in 2010. Also offered via IP Global, this plush complex has the advantage of being close to international schools, shopping centres and restaurants, and is located only 15 minutes from the city centre. Prices start at around HK$$2.2 million for a 1,015 square-foot apartment, and as with Hung Vuong Plaza, IP Global offers a guaranteed fixed return at 6.5 percent gross per annum for two years. Alternatively, how about the Axis Residence Deluxe, where the fully serviced apartments are ready to rent out. For HK$780,831, you can purchase an 892 square-foot, three-bedroom flat that’s a ten-minute commute from the centre.
While the recent tragic events that occurred in Mumbai may have understandably quelled investors’ interest in buying real estate in India’s financial capital, the country’s astonishing economic growth cannot be ignored. Price Waterhouse Coopers’ Emerging Trends report, for example, puts India’s silicon valley, Bangalore, in fourth place for investment and number one for development prospects. The average apartment space comes in at HK$284 per square foot, making it a much, much cheaper option than Mumbai, where apartments cost around HK$3,861 per square foot.
One good investment in Bangalore is Aquila Heights, Bangalore’s tallest and most luxurious residential address, standing 105-metres tall, and due for completion in 2010. One of the best features of this property is that 89 percent of its 6.3 acres has been retained as open, green space. Prices here start at HK$1.04 million for a 1,418 square-foot apartment. If you’d prefer something closer to the ground, you can always check out Prestige Golfshire, a development of luxury villas with its own 18-hole golf course, hotel and convention centre, where HK$18 million will get you a charming 9,905 square-foot property. The smallest villas within this luxury complex are 7,485 square foot and have a price tag of HK$10.6 million.
Investors should take note, however, that India’s residential boom has stalled, and prices have not risen in the last six months. In addition, buying property as a foreigner is still difficult here, and you will need the approval of the Royal Bank of India before you can go ahead with your purchase. Should buying an individual property in India seem too risky, investing in an Indian property fund is as good a bet as any.
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