Chia Boon Kuah, chief operating officer (property sales) of Far East Organization, Singapore’s largest real estate developer, was in India recently to encourage Indians to invest in Singapore’s real estate. The firm is also looking for more investment opportunities in India. The company, along with its partner Wellside International Pte Ltd of Singapore, has already acquired Lady Ranu Mukherjee House in Kolkata. The COO spoke to Mint’s Shilpa Shree about how Singapore can be an interesting option for Indians as the city-state’s GDP is expected to grow in the range of 6-8% over the next few years. The real estate prices in the city-state have grown over 30% in the first half of 2007. The country will see an additional supply of 18,000 homes in the near future. Around 6,000 of these homes are targeted towards foreigners. Excerpts:
1. Why is Singapore an interesting option for Indians who want to own property?
Singapore’s booming economy and its good public infrastructure and vibrant yet safe living environment, as also its proximity to India, has attracted many talented Indian professionals to this country. The availability of Indian international schools in Singapore is an added attraction for Indians. Singapore’s ability to attract foreign investments and talent through its open-door policies have underpinned the country’s economic growth, leading economists to predict its GDP will grow at the rate of nearly 8% for the next five to eight years,which is considerably higher than the present growth of 4-6%.
Foreigners made up 23% of the total homebuyers in 2006. However, in the first half of 2007, this figure has gone up to 34%. Indians are one of the top three foreign homebuyers in Singapore this year. These are people who have lived and worked internationally, and believe that the property market here has revived. And trust that they will derive value from investing in Singapore.
How has tourism impacted the Real Estate business of Singapore?
In the last two years, property investment sales have more than doubled to S$26 billion last year from S$12 billion. According to the latest Knight Frank realty report, prices of private residential properties rose by 8.3% quarter-on-quarter and 21% year-on-year, the highest growth in the last seven years. The new initiatives to attract international business and tourists – the Singapore Grand Prix, a city circuit to be run at night, the Marina Bay Sands Integrated Resort developed by Las Vegas Sands, Resorts World at Sentosa with Universal Studio, the 94 hectares public gardens by the bay on prime waterfront land, three super malls along Orchard Road, the Singapore Flyer and the Marina Bay New Downtown, an international business and financial hub, all of which will come on stream between now and 2010 – are turning the country into an exciting place for business, play and live.
3. How is Singapore’s landscape changing?
The government’s strategic policies to remake the city-state into a vibrant global city are reaping bountiful rewards. From an economy relying on export and manufacturing, Singapore’s growth is now driven by a diversity of engines: financial services, logistics, education, medical services, biomedical sciences and research, infocomm, construction and tourism. The planned expansion of its population to almost 1.5 times its current size will be another important growth factor.
4. Do foreigners who want to own land in Singapore face any hurdles?
Indians interested in investing in Singapore’s real estate have to apply for permanent residence status. To do so, you have to invest at least S$2 million in business setups, other investment vehicles such as venture capital funds, foundations or trusts, and/or private residential properties. Up to 50% of the investment can be in private residential properties.
However, owing to Singapore’s limited land area, landed properties are treated as a special category. Such properties purchased by foreigners or permanent residents are subject to the government’s approval. Foreigners or permanent residents can own only one landed home, with land area not more than 15,000 square feet, at any one time and they must occupy it themselves.
You already own a property in India. Are you looking at buying more? If yes, where? Are you also looking at having more partnerships, like the one you have with Wellside international?
India — with its rich heritage and culture and tremendous business opportunities and tourism potential — is a very exciting country for us to be in. We, together with our partners, the Wellside International and Starwood Capital Global, plan to develop a chain of hotels and convention facilities throughout India in various categories — from heritage to business hotels and from budget to luxurious resorts. In addition to this hospitality venture, we will continue to explore other real estate opportunities in India. Future developments could be investments by the company itself, or in partnership with Wellside International.