Property Life

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ASIA’S NUMBER 1 PROPERTY GUIDE • DISPLAY UNTIL 30th NOVEMBER

FEATURE

SAFE HAVEN Singapore unfazed by global uncertainty

CAPITAL GAINS

Malaysia’s residential market remains as attractive as ever

TAKING OFF

The recovery of Vietnam’s property market

Eye on Thailand

Special report on the land of smiles

PROFILE

Jeffrey Heller on saving the world, one masterplanned project at a time

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The most liveable development in Asia Lifestyle | Business | Living

The year 2012 is an exciting year for Global Capital & Development’s (GCD) Medini, Asia’s latest prime development. Right in the heart of Iskandar Regional Development in southern Peninsular Malaysia, it is strategically located between Singapore and Kuala Lumpur.

Following the land-swap deal between Singapore and Malaysia, the sovereign wealth arms of both countries, Temasek Holdings and Khazanah, have invested in developing a joint wellness township in Medini. This will also open up further investment opportunities between the two countries and to companies based in Singapore and Kuala Lumpur.

The second half of 2012 will see the launch of groundbreaking projects, including LEGOLAND Malaysia and Marlborough College. These launches come on top of impressive facilities already in existence, such as Educity, which includes renowned Newcastle Medical University. In 2013, the Gleneagles Medini Hospital will be launched.

Exciting investment opportunity

B

anking on South-East Asia’s rapid growth, Medini’s proximity to the developed markets of Singapore and Kuala Lumpur makes it an ideal base for com-

World-class infrastructure

A

s a new and prime development, Medini is designed with world-class infrastructure to efficiently connect it to Singapore, Asia and the rest of the world. Its

panies planning to expand in the region. Located just 15 min-

transport and communication infrastructure includes world-

utes across the Tuas Second Link that connects Singapore and

class connections to international airports and sea ports; well-

Malaysia, Medini offers a more cost-effective business environ-

planned regional rail, rapid transit and light rail systems and a

ment compared to the rising operational cost in Singapore. In

local bus network; and excellent telecommunication links and

addition, with the support of the Malaysian government, future

high-speed broadband internet to support its business environ-

infrastructure projects are on the drawing board to ensure

ment. It also has an integrated infrastructure to support high-

Medini’s easy accessibility to the region’s transportation hubs. In

quality education, health care and other community facilities.

fact, Medini is accessible via the Coastal Highway to the city centre of Johor and the Senai Airport, which is a mere 40 minutes by air from the Kuala Lumpur International Airport.

Unique development approach

T

he development of Medini follows a demand-led approach that identifies the requirements of end-users.

Whether for developers, tenants or tourists, GCD en-

sures that Medini has the right social amenities built in stages to cater to the needs of its growing population.

Cost advantage

A

s Asia’s economy grows at an unprecedented pace, Medini offers an attractive cost advantage for businesses to operate and grow. It offers a high standard

of living similar to that of Singapore, Hong Kong, Taiwan, Japan and South Korea, but at much lower cost. Its pro-business environment, coupled with the Malaysian government’s support, ensures that this fully integrated, forward-looking, master-planned community has everything every business needs to grow.

In addition, to ensure the growth and development of the city, GCD has embarked on two important projects: Media @ Medini and the Medini SME Business Park.

Designed as a support community to Pinewood Iskandar Malaysia Studios – a project aimed to position Medini as the centre of South-East Asia’s film industry – Media @ Medini will house production houses, film studios, office spaces, residences and hotels for the entertainment sector. With the growth of the sector, Medini is expected to attract more tourists to the city already teeming with lifestyle developments.

The SME Business Park, meanwhile, will provide a high-quality business environment for the SME sector, which forms the backbone of the South-East Asian economy.

For more information, visit www.gcdmedini.com

Global Capital & Development (Singapore) Pte. Ltd.

Singapore 80 Raffles Place UOB Plaza II, #33-20, Singapore 048624 Tel. +65-6632-7272 Fax +65-6535-5710

Investor Related Enquiries Tel. +65-6632-7272 info@gcdmedini.com

Malaysia Nusajaya Resort Village No. 7, Ledang Heights, 1st Floor, 81560 Nusajaya Johor Darul Ta’zim, Malaysia Tel. +60-7-513-5008 Fax +60-7-513-5018

Media Enquiries Tel. +65 6213 7854 Lincoln Mah media@gcdmedini.com

See next issue of Property Life for an in-depth look at GCD’s Medini Project.

THE TEAM Managing Director/Publisher Alexander Knight alex@panashcomedia.com Commercial & Finance Officer james harrison james@panashcomedia.com Editorial Officer jennifer harrison editorial@panashcomedia.com Editor-in-Chief Rodel Ambas, Jr. editorial@panashcomedia.com Editor Franz A. D. Morales editorial@panashcomedia.com

PUBLISHER’S NOTE While the global economic outlook is not exactly looking rosy at the moment, Asia is largely bucking the trend: growth is strong across the board, by comparison with Europe and the United States, and specifically in South-East Asia, property markets are in grand health.

South-East Asia plays host to not only some of the most beautiful beach villas, but there are high-rise condos in Singapore where one can garage one’s Lamborghini next to the living room, golf-resort homes where players need only to step out the front door to tee off, and a whole new property market coming on stream in Burma. In fact, prices in some parts of Rangoon have hit as much as US$2,500 per square foot – which is actually more expensive than similar locations in Bangkok – and space in the few existing office buildings is as high as US$200 per month per square foot.

On the home front, we here at Property Life have been working hard and are proud to announce the launch of both the Property Life Seminars and our new Developer Awards. The seminars, to be held regularly from October, will bring together property buyers and specially selected vendors from around the world. This is where the real bargains are to be found, and they can be snapped up on the spot. The Developer Awards, designed to be a highly useful tool for our readers, also kicks off next month. Stay tuned as we spotlight the Top 10 developers in each of the property hot spots.

For property buyers, Property Life is a highly valuable resource in Asia – and the world – and as such, it is constantly evolving to suit our readers’ needs. You will no doubt notice changes from issue to issue in both our print publication and our newly launched iPad application (available at the App store for your iPad or iPhone). This comes through feedback that we receive from our readers at facebook.com/propertylifemagazine and followers on Twitter @property_life and #PropertyLife

Design and Production Arif villanueva adil production@panashcomedia.com List Meister SHANMUGAM ‘Alex’ Arulkumaran alex.arul@panashcomedia.com Senior Programmer Timothy Escopete tim@panashcomedia.com Sales Executives melissa cerina Kevin Goldsmith advertising@panashcomedia.com HR/Office Manager Angeline rivas recruit@panashcomedia.com Circulation and Distribution LETTy adviento circulation@panashcomedia.com DOWNLOAD OUR iPad and iPhone app from the Apple App Store We really want your feedback! Please contact us: Telephone: +65 3158 3449 • Fax: +65 6534 9391 E-mail: info@panashcomedia.com For regular updates and more commentary you can Like! us at facebook.com/propertylifemagazine and follow us on Twitter @ property_life and #PropertyLife Property Life is published by

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Happy reading.

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Contents SEPTEMBER-NOVEMBER 2012

FEATURES

44

EYE ON THAILAND From where to buy and organising a team of professionals, to getting your car fixed and learning the Thai language, we cover everything you need to know about Thailand. © sxc.hu/mobias

14

18

26

40

TAKING OFF

CAPITAL GAINS

SAFE HAVEN

MANILA RISING

Being one of Asia’s rising stars, Vietnam shows plenty of promise.

But how long it can sustain growth is another matter.

4

Despite slowdown, Malaysia offers an attractive market for investors.

www.propertylife.asia

Singapore offers more than stability to potential property investors.

To describe the Philippine capital’s property market growth as staggering is an understatement.

Contents SEPTEMBER-NOVEMBER 2012

PROPERTY LIFE SEMINARS

62

22 Why invest in sydney invest in UK student 32 why accommodation Australia’s most famous city is also a top-notch property investment destination.

Thousands flock to the UK’s many universities, making student accommodation a safe bet.

56 why invest in melbourne It may be second only to Sydney, but its liveability is unparalleled.

FEATURES

62 WOMAN ON TOP

Kwanrudee Maneewongwatthana, Raimon Land Plc’s Deputy Vice-President for Marketing, shares her company’s plans for the future and what they are doing to help save the environment.

THE WORLD 64 SAVING THROUGH ARCHITECTURE If the world has more Jeffrey Hellers, the future may not turn out to be monochromatic rubble after all.

ASIAN ART 67 BRINGING TO THE WORLD

70 67

Talented Thai designers Decha Archjananun and Ploypan Deerachai share their inspirations and predictions in future design trends.

70 LIFE’S A BEACH

Here are eight verdant properties that offer a fabulous beach lifestyle (not to mention good investment returns).

AMIDST 78 DEALS THE DOWNTURN

The Spanish property market has definitely seen better times, but opportunities await savvy investors.

83 WATER TOWNS

A look at two iconic Olympic venues that, although worlds apart, are stunning accounts of architectural achievement.

83 ON THE COVER

| MORE THAN A PROPERTY.

Owning this Laguna Village Deluxe Residence means you can enjoy Thailand’s leading integrated resort community’s unmatched facilities and extensive benefits, secure in the knowledge that while you kick back and relax, your investment is hard at work. Price starts at US$1.8 million.

6

www.propertylife.asia

REGULARS

8 12

NEWS CURRENT STATE OF SOUTH-EAST ASIA’S PROPERTY MARKET A look at the region’s property market.

88

PROPERTY INVESTMENT How do you know when you’re ready for property investment?

BRITISH BUYERS

The ultra-rich speak: ‘What is the main threat to your wealth?’

STILL LEAD THE WAY Official figures published recently for 2011 show the British bought more property in Spain than any other foreign buyers.

The ongoing global financial crisis.

SINGAPOREAN

Of the 22,260 overseas purchases in 2011, almost 20% were British. The number of foreign buyers was up from 4.45% of all property sales in 2010 to 6% in 2011.

Regional war. MIDDLE EASTERN

Number of Spanish properties purchased in 2011 by nationality of buyer

The devaluation of money.

HONG KONG

Nationalisation of land. ZAMBIAN Inflation. INDIAN A hostile takeover or the government. RUSSIAN

Source: The Wealth Report 2012.

10to watch

Future locations

British

4,007

French

Germans

1,972

1,702

Russians

1,645

Locations set to see rising demand for new-build property ❶ Abu Dhabi ❷ Japan ❸ Milan ❹ Barcelona ❺ Vienna ❻ Munich ❼ USA (Los Angeles and Florida) ❽ Africa (game reserves)

Italians

1,187

Swedes

1,176

Norwegians

1,049

Belgians

1,031

❾ Brazil (São Paulo and Rio de Janiero)

Canada (Montreal and Vancouver) Source: Knight Frank Residential Research

RICH PEOPLE, WHERE ART THOU? We know that centamillionaires, those with disposable assets of US$100 million or more, have been increasing in numbers, only we don’t know by how much.

But according to Knight Frank’s The Wealth Report 2012, from 2011 to 2016, the world’s centa-millionaires will see their ultra-elite club swell in SouthEast Asia, from approximately 18,000 to about 26,000, an increase of 44%. Their numbers will increase two-fold over the same period in Africa and South and Central Asia.

INCREASE,

2011–2016

GLOBAL

NORTH AMERICA

LATIN AMERICA

+37%

+24%

+60%

17,000 21,000

5,000 8,000

2011–2016

63,000 86,000

=1,000 centa-millionaires, 2011 2016 Centa-millionaire=US$100m disposable assets

TOP 10 GLOBAL RETAIL STREETS (USD per square foot per year)

RETAIL THERAPY With rents rising by 35% per year, Hong Kong’s prime retail streets are gaining on New York’s 5th Avenue for the title of world’s most expensive retail zone, pushing international chains such as H&M out to the cheaper suburbs.

According to Colliers International, average annual rent in the territory’s Queen’s Road Central and Canton Road soared to US$1,831 per square foot per year. The real estate broker estimates that Hong Kong’s retail rents will overtake New York’s by as early as 2014.

STREET/PRECINCT

RENT

ANNUAL CHANGE (%)

Fifth Avenue, New York

$2,633

22.5

Queen’s Road Central, Hong Kong

$1,831

34.7

Canton Road, Hong Kong

$1,831

30.2

Old Bond Street, London

$1,601

11.1

Avenue des Champs-Élysées, Paris

$1,239

Flat

Causeway Bay, Hong Kong

$1,024

34.5

Madison Avenue, New York

$989

39.7

Bahnhofstrasse, Zurich

$975

Flat

Via Monte Napoleone, Milan

$885

–0.8

Pit Street Mall, Sydney

$865

–10.0

SOURCE: Colliers International

NAIROBI

HOW MANY SQUARE METRES WOULD US$1 MILLION BUY YOU?

588

Source: The Wealth Report 2012

MONACO

17

HONG KONG (Houses)

21

PARIS

38

MANHATTAN

43

57

51

127

158

+7%

+67% +100% +50% +100% +44%

14,000 15,000

US$39.9

2,000 3,000

SOUTH & CENTRAL ASIA

MIAMI

EASTERN EUROPE

1,000 2,000

MIDDLE EAST

88

AUCKLAND

WESTERN EUROPE

3,000 5,000

AFRICA

BEIJING

SHANGHAI

MUMBAI

SOUTH-EAST ASIA

3,000 6,000 18,000 26,000

T R I L L I O N Total net worth of centa-millionaires in 2011 SOURCE: The Wealth Report 2012

It s a pricey, pricey world

SOURCE: Mercer Consulting

❾

Despite the global slowdown, North American, Asian and African cities have seen their cost of living rise this past year, according to a new report from human resources firm Mercer Consulting. The study looked at 214 cities worldwide and used New York City as the benchmark. Tokyo claims the dubious honour as the world’s most expensive city for expatriate employees.

So which cities make the rest of the top 10?

TOKYO, JAPAN

①

Tokyo has risen from number two last year. Being one of the world’s major financial capitals, it is one of the most liveable cities on earth. However, its housing market is expected to be hit by shrinking demand from expats due to corporate cost-cutting. Average rent of a luxury two bedroom apartment here is US$4,848.

LUANDA, ANGOLA

②

Finding a secured luxury property for an expatriate employee is the main reason Angola’s capital is on this list. Indeed, despite the average monthly rent of a two-bedroom apartment falling US$500 compared to last year, it still remains high at US$6,500.

Being the largest recipient of foreign direct investment in sub-Saharan Africa, thanks to its oil boom, Chinese, Brazilian and US companies usually send employees here to oversee local operations.

UN VRS ©S XC.H U/

③

OSAKA, JAPAN

Being Japan’s second most important city, Osaka has a high rental price (US$3,062 for a luxury two-bedroom apartment) because of its dense population and high expatriate demand. A relatively strong yen has also heightened the cost of living for expatriates.

④

MOSCOW, RUSSIA

Demand for luxury property (monthly rent of US$4,200 for a luxury two-bedroom apartment) is high in Moscow because of growing wealth from the county’s oil boom. In fact, the Russian capital is home to the most billionaires in the world (79), according to Forbes.

⑤

⑥

ZURICH, SWITZERLAND (tie)

One of the two Swiss cities to make this list, Zurich is an attractive location for international firms. Expatriates are also drawn to Zurich’s high quality of life. The monthly rent of a luxury twobedroom apartment here costs US$3,614.

⑥

SINGAPORE (tie)

Like other Asian financial centres, Singapore has seen a big inflow of expats, which has pushed up the cost of housing and other living costs. Known for its high property prices and rents compared to the rest of South-East Asia (the monthly rent of a two-bedroom apartment is US$3,588), Singapore is also an extremely expensive place to own a car, which can cost up to US$74,000 just for the infamous Certificate of Entitlement (COE).

US$8.29 average cost, including service, of a cup of coffee in Tokyo.

⑨

HONG KONG

Hong Kong’s reputation as a major financial centre remains a big draw for international businesses and expatriates, which in turn pushes up the cost of living. Dubbed as the world’s least affordable housing market, every square inch of land in this Chinese territory is always at a premium. In fact, one of the most substantial increases in the cost of living in Hong Kong has been in renting property. The average monthly rent for a luxury two-bedroom apartment jumped to almost US$7,100 this year.

⑩

⑧

NAGOYA, JAPAN GENEVA, SWITZERLAND

Home to 20 international organisations, over 44% of Geneva’s population is made up of foreigners. The city’s expensive private schools are said to be the best in the world, further adding to the high cost of living for expatriate families. The average monthly rent for a luxury two-bedroom apartment here has gone up to around US$4,800.

N’DJAMENA, CHAD

The influx of expatriates working in Chad’s oil industry has pushed up the cost of living in its capital N’Djamena. Companies must also take into account the personal safety of employees in this violence-mired city, making it extremely difficult to find suitable and safe accommodations and the few available places extremely expensive.

Expats are generally drawn to the city because of its large industrial sector (Toyota’s luxury brand Lexus is based here and Mitsubishi Motors has an R&D division in Okazaki, a suburb of the city). Although renting a luxury two-bedroom apartment is still half the cost of that in Tokyo (US$2,551), Nagoya is expensive in other departments such as food and fuel. To top it off, a surging yen has resulted in higher prices in general for expats living in Japan.

The current state of South-East Asia’s PROPERTY MARKET Although South-East Asia’s property market saw a moderation in activity in the first quarter of 2012 following an impressive 2011, rents and capital values are still rising in this part of the world. The region’s luxury residential markets also saw a seasonal lull, but markets in Jakarta and Manila remained generally resilient, fuelled by strong domestic demand.

Further, the 2012 edition of Jones Lang LaSalle’s biennial index known as the ‘Global Real Estate Transparency Index’ shows that South-East Asia’s property markets have made significant inroads in improving transparency over the past two years, with three of the top 10 improvers globally from this region: Indonesia, the Philippines and Vietnam. With the exception of Vietnam, the region’s major markets (Indonesia, the Philippines, Malaysia, Singapore and Thailand) are either in the index’s ‘transparent’ or ‘semi-transparent’ band.

The rise of FDI into ASEAN is a testament to global investors’ confidence in the long-term growth potential in this region.

The region’s economic performance is expected to buoy property market activity this year, says Jones Lang LaSalle’s Jane Murray. She added that corporate balance sheets are generally in good shape, investors remain keen to purchase, and rents and capital values are expected to increase in most markets and sectors.

‘Under the scenario that the world avoids a recession, we expect any decline in rentals and prices to be temporary and for property market activity levels to pick up again in 2013.’

Here’s a closer look at the region’s major markets.

1

THAILAND▶ Bangkok condos boast of high yields, the city’s rental market is pro-landlord, and unusually low prices offer an opportunity to investors. However, the buying process in the country is complicated and foreigners can’t buy land.

According to CBRE, Bangkok’s property market has seen a significant recovery from the effects of the 2011 flooding. Prices of condominiums are rising due to higher land and construction costs.

Demand in the luxury condominium market is driven primarily by endusers and partly by buy-to-let investors who plan to use purchased properties in the future. Record prices have been achieved by best-quality condominiums in the best locations.

Condominium living is also becoming more widely adopted and there is still potential demand particularly in densely populated areas. However, developers will face the challenges of identifying new opportunities in new locations, as well as to sell out poorly performing projects before they are completed.

2

MALAYSIA▶ Its property market may be considered liberal compared to Thailand’s and Indonesia’s, but it’s not without drawbacks. The Malaysian government imposes a high income rental tax and the market is generally perceived as pro-tenant. However, reforms undertaken in recent years have made Malaysia a popular destination for foreign buyers, with the Chinese and Singaporeans leading the pack.

Malaysia’s home prices have continued to increase, but at a slower pace, due to a GDP growth slowdown to 5.1% in 2011, from 7.2% in 2010. Ac-

cording to the Malaysian Institute of Economic Research, its economy is expected to grow by 4.2% in 2012.

In the first quarter of 2012, the national house price index rose 6.1% (3.7% in real terms) year-on-year to Q1 2011, down from 8.9% growth last year (5.9% in real terms). The average house price was US$68,905 at year end.

Effective January 2010, the price floor below which foreign buyers can buy is hiked to US$145,383, twice the previous level. Foreign purchases above US$145,383 are placed under the ‘purview of the State Authorities’ under the new regulations, with approval expected to take one to two months.

Malaysia, especially Kuala Lumpur, Johor Bahru, Kota Kinabalu, Kuching and Penang, has an active condominium market. Condominium price rises are expected to moderate in 2012.

Oversupply of high-end condominiums remains a concern, despite high demand. CBRE projects that around 2,300 units of high-end condominiums will be completed in 2012.

3

SINGAPORE▶ Strong and stable economy, low transaction costs and a pro-landlord rental market make Singapore’s property market a good long-term investment. However, its market suffers from very low yields.

Singapore property developers are pessimistic about the ­outlook for the city-state’s real estate market in 2012.

Some analysts forecast a 5–10% drop in property prices this year.

According to Wong Heang Fine, president of the Real Estate Developer’s ­Association of Singapore, concerns exist because of the global economic

Demand in the Thai capitalʼs residential market remained strong in Q1 2012.

Pearl Residence on Sukhumvit 24 was the only project completed in Q1 2012, adding 78 units to the total stock.

The overall stock now stands at 23,102 units.

One new high-end condominium project was launched in Q1 2012, namely The Capital Ekamai-Thonglor. This is the second condominium project from the KPN Group and has 281 units.

According to Knight Frank, Ho Chi Minhʼs market still has not witnessed any significant changes through Q2 2012.

Approximately 976 apartment units were launched in Ho Chi Minh City in Q2 2012. The affordable sector constituted the majority of new supply with 66% of total stock.

The new supply in this quarter is 40% lower than Q1 2012.

Two mid-end projects have launched to the market including La Bonita, Binh Thanh District (60 units) and 155 Nguyen Chi Thanh, District 5 (272 units).

The Philippine capitalʼs residential property market jumped to roughly 90,000 units by the end of 2011, from a mere 7,000 units completed at the start of the millennium. From 2005 to 2011, supply growth has averaged 30% annually.

The number of high-end launches slowed as developers focused on the more saleable mid-price range condominiums.

Growth is expected to be robust over the next few years. Jones Lang LaSalle Leechiu says that more than 200 projects are expected to be constructed from 2012 to 2016, which will add 120,000 housing units to the market.

In Q1 2012, one high-end development, M City, located on Jalan Ampang, was launched. This leasehold development comprises 500 units within one block of 35 storeys.

Supply increased from 20,929 units to 21,214 units with the completion of 285 units in Bangsar.

In the 12 months to end-Q1 2012, the Indonesian capitalʼs luxury residential market delivered a strong price performance, with growth of about 16%, according to Jones Lang LaSalle.

The number of new launches in the prime districts remained low in Q1 2012, with only two new projects launched in January and February and only 111 units launched overall in the Core Central Region. These projects, Aspen Linq and 26 Newton, added a combined total of 48 units to the market with mixed success.

outlook. Png Poh Soon, director of research at Knight Frank, believes that the additional buyer’s stamp duty had some impact on buyer sentiment.

4

VIETNAM▶ Despite positive economic signs and cooling inflation, Ho Chi Minh City’s apartment sales remain stagnant. According to Knight Frank, a lack of liquidity and difficulties in obtaining credit continue to be the major hurdles for potential home buyers and developers.

CBRE managing director Marc Townsend said Vietnam’s macroeconomic fundamentals were moving in the right direction, while unit pricing appears to be stabilising. ‘We expect this increase in enquiries to translate into an uptick in sales around the turn of the year.’

The selling price for new projects launched in this quarter ranges from US$590 to US$842 per square metre for the affordable segment and from US$1,162 to US$1,403 per square metre for the mid-end segment.

Vietnam’s real estate market, long perceived as non-transparent, saw an encouraging improvement in its ranking in the 2012

New supply in 2012 is projected to reach 18,140 units, or more than double from 8,088 units in 2011, says Cushman and Wakefield.

Low interest rates might at least encourage banks to use money that is available to them to dispense as consumer loans for homes.

edition of the Global Real Estate Transparency Index. The country is now positioned right next to the ‘semi-transparent’ tier. A likely movement up into the ‘semi-transparent’ tier in the next two years would afford the country the power to rebrand itself for foreign investors.

5

PHILIPPINES▶ High-yield for luxury condos, a pro-landlord luxury market and a strong expat rental market driven by the booming offshoring industry are what make the Philippines’ residential property market attractive. However, much needs to be done, especially in terms of bureaucracy, which is a major disadvantage.

The country’s property market is largely driven by its booming offshoring industry and remittance from Filipinos working abroad, and less on investors seeking higher returns. It is estimated that 60% of remittances directly and indirectly benefit the real estate sector.

According to the World Bank, the country’s property market is generally stable, but the residential segment may face ‘risks aris-

ing from oversupply’. The number of condominium units in the capital Manila jumped to roughly 90,000 by end-2011 (from a little more than 7,000 condominium units completed in 2000), said Jones Lang LaSalle.

6

INDONESIA▶ Very high rental yields and a landlord–tenant neutral rental market make Jakarta’s high-end residential properties very attractive. However, the country is also hampered by serious challenges, such as ownership limits, high rental income tax, high transaction costs and overbuilding especially in the capital.

In addition, starting in June this year, Indonesian banks will strictly implement minimum payments for home purchasers to curb potential loan bubbles that could hurt the economy.

Housing loans will now be pegged at 70% of the home value. However, Bank Indonesia, the country’s central bank, clarified that properties less than 70 square metres will not be subjected to the new regulation.

House prices in Indonesia have risen an average 4.5% to end-Q3 2011.

Taking off With its economy growing at its fastest pace, Vietnam’s property market is showing signs of measured recovery. By Rodel Ambas Jr.

V

ietnam’s economic history is marked by a dramatic rise from being one of Asia’s poorest to one of the fastest growing. After decades of stagnant growth under a centrally planned regime, the Vietnamese government initiated a series of market reforms in the mid1980s. As a result the country saw its GDP grow almost 8% annually from 1990 to 1997, and 7% from 2000 to 2005. Despite the late-2000s economic downturn, its economy GDP grew 6.8% in 2010.

Vietnam’s unique position as a gateway to Indochina, its pristine beaches and lush interiors also offer distinct advantages for high-end property developments and as a vacation-home market. Aside from Ho Chi Minh City and Hanoi, the coun-

try’s other cities such as Danang and Hue and numerous islands scattered along its 3,444-kilometre-long coastline boast of vacation properties at par with those found in Thailand.

Although it cannot be denied that Vietnam’s property market isn’t as mature as Thailand’s, the government is taking little steps to boost this important sector by improving the country’s infrastructure.

For example, a larger airport to serve Ho Chi Minh City is being planned. Intended to become operational by 2020, the airport located in Long Thanh 40 kilometres north-east of Ho Chi Minh City has a maximum capacity of 100 million per year once completed.

In addition, state-owned Management Authority of Urban Railways will start the

construction of Vietnam’s first metro line in Ho Chi Minh City. The 17.1-kilometre, 11-station metro line will commence construction on 28 August.

This news couldn’t be more exciting for the city’s property market. According to Marc Townsend, Managing Director of CBRE Vietnam, increased access to public transportation has a positive impact on property prices.

He cited a study released by the Royal Institute of Chartered Surveyors (RICS) in the early 2000s, which found that property values in close proximity to metro stations increased by up to 25%. ‘The impact on commercial space was even more startling, with some areas surveyed increasing by up to 120% compared to the period before the public transport.’

© SXC.HU / TIMOBALK

PHOTO COURTESY OF CBRE VIETNAM

Townsend added that the same trends will be seen in Vietnam. ‘Usually, some prices fall in anticipation of construction…as no one likes to live next to a construction site. But these same landlords will be handsomely rewarded as their units become more attractive, and people are willing to pay a premium, once the project is completed.’

After hitting 11.8% in December 2010, the battle against inflation, too, is now finally being won, said Townsend. ‘Interest rates are coming down as well.’ However, he admitted that although these improving macroeconomic fundamentals have given buyers enough confidence to begin exploring the market for opportunities, this has not translated into a wide-scale increase in transaction volumes.

Fundamentally, it also is a question of price, said Townsend. ‘Prices have been declining for some time, and people have become weary of stories discussing the latest price drops. With prices softening, residential buyers just stay out of the market as buyers will simply not buy property if they think prices will go down in the future.’

It is therefore not surprising to see developers trying various strategies to stoke sales in the current market. ‘And offering discounts is one of them,’ said Townsend.

‘I don’t think there is any problem with developers offering discounts and high-end projects are no exception. This actually creates a great opportunity for both the developers and buyers. By offering discounts, developers can offer their products to a wider audience.’

And with discounts being available in the current market, buyers have a great opportunity to step up into a market segment they may previously have been priced out of. ‘Discounts really speak to the Vietnamese market,’ said Townsend. ‘When you look at consumer research data, discounts are routinely cited as the most attractive promotions for Vietnamese consumers, and it is quite savvy for developers to try and capitalise on this.’

For example, on the first sale day of Company 557’s Au Co Apartment Tower in Ho Chi Minh City’s Tan Phu District, half of the 147 units on offer were snapped up, partly a result of the apartments’ average price of US$53,000, a 7% discount, and loans offered by its partner bank at a reasonable interest rate. In addition, Hung Thinh Land recently began sales of 88 units at its project on Nguyen Chi Thanh Street in District 5 at an average price of US$72,000 and 50% were booked in just a few days.

From office to apartment District 3’s DB Court, originally a Grade C office building, was converted into serviced apartment use and has been quite successful.

Some people have also seen the benefits of investing in project conversions. ‘Office rents have been falling for the better part of three years, so office investors are looking for options,’ said Townsend.

Properties that were previously one- or two-star hotels or office buildings that were converted into serviced apartments have been quite successful. For example, there has been a strong take-up at DB Court, a new serviced apartment project in District 3 in Ho Chi Minh City.

‘This was originally a Grade C office building, but after conversion it is a Grade B serviced apartment, with the opportunity to obtain rents that are US$8/square metre higher than if it was an office building.’

Aside from price, construction quality and construction schedules are important in this market, and this is more so for local developers if they plan to compete with cash-rich and more experienced foreign developers. ‘Nam Long, Thu Duc House and Hoang Anh Gia Lai all have good reputations in the market… [and] for a developer to succeed, it should be prepared to deliver a consistent product.’

For condo developers, buyers need to be confident that the project will be completed and delivered. Many buyers feel they have been burned with projects that are stalled.

Developers that can offer a product that meets the true demand of buyers, with consistent quality and construction progress,

will certainly be able to compete with the likes of Keppel and CapitaLand.

Recently, Vietnam’s State Bank cut deposit interest rates which ran as high as 13% down to a single digit 9%. The benefit is expected to be twofold. First for businesses, lower interest rates may stimulate investment. Second for investors holding cash in bank deposits, the lower rates may create more interest in shift portfolios to property.

So far the market reaction has been lukewarm given that lending rates still command a considerable premium. Volatility remains the sworn enemy of businesses and certainly this remains a key to the current regime of negative investment sentiment.

But the question that people always ask is when will the Vietnamese property market start to recover. ‘This is the million-dollar question,’ said Townsend.

‘The real question [that we should be asking] is how to drip money back into the market, and what do you get out of it. People think my job is to explain how you can double your money every two years, but in reality what CBRE is most successful at is helping our clients identify the opportunities that will put them ahead of their competitors.’

He added that people need to be realistic moving into the future, and to keep in mind that not all markets move in the same direction or at the same speed.

‘The foreign euphoria for the Vietnamese real estate market is long dead,’ said Townsend. ‘Now, what we need to do is concentrate our time and energy on projects that can succeed. Just because we have 10 development sites, or 10 projects, or 10 ideas, doesn’t mean we should pursue all 10 at the same time.’

NEWS

Advancing standards in land, property and construction RICS: 2nd Annual Valuation Conference and Prelaunch of Guidance Notes, 3–4 September 2012 By Jennifer Harrison

R

ICS, the Royal Institute of Chartered Surveyors, is the world’s leading professional body for qualifications and standards in land, property, construction and associated environment issues.

At a recent conference held at the Marina Bay Financial Centre in Singapore, RICS officially launched its new ‘Red Book’ as a part of its ongoing commitment to promote and support high standards in valuation.

The Red Book has been re-issued to fully incorporate the new International Valuation Standards. ‘Without internationally standardized practices, there can be no “global” market. RICS delivers products to international standards,’ says David Faulkner, Member, Professional Board of the International Valuation Standards Council, and Executive Director, Valuation and Advisory Services, Asia, for Colliers International.

Chartered surveyors and asset valuers, including real estate agents, who are also RICS-qualified members are required to

follow these standards while providing any Red Book valuation services, as these standards offer the best practice guidelines and related commentary.

The Red Book serves as a list of rules, best practice guidelines and related commentary for all RICS members undertaking asset valuations, and is a useful reference for valuation users and stakeholders.

More than that, explains Mr. Faulkner, accurate asset valuation is extremely important to banks, lending institutions and insurance providers to the point where the valuation itself becomes an asset. Accuracy in valuation, therefore, becomes even more necessary, especially ‘in terms of proportion to lending and lending ratios’.

‘In Singapore, quality standards are relatively easy to compare based on current market values and price per square foot. Not so in the UK, for example, where the process is much more convoluted.’

The whole process of valuation is, in fact, to provide information to the mar-

ketplace and to help improve efficiency.

Mr. Faulker continues: ‘Without valuation, liquidity is very stationary. Valuation helps lubricate that fixed status into a more liquid form. With more accuracy and valuations that are appropriate to the market, resources can be released into marketplace.’

At the end of the day, what any property investor wants to know is the condition and value of the property – residential or commercial – for the current market.

This is where a reliable and qualified estate agent or chartered surveyor makes a difference. Ben Elder, Global Director of Valuation for RICS, says, ‘Being a good asset valuer is like being Sherlock Holmes. Valuation is a process of discovery – first you collect the evidence and then you formulate your conclusions using a unified system of checks and balances.’

There are 397 chartered surveyors in Singapore, of which approximately 30% specialise in quantity surveying and 70% in building surveying, valuation and other areas.

Royal Institute of Chartered Surveyors London

12 Great George Street Parliament Square London SW1P 3AD, UK t +44 (0)870 333 1600 f +44 (0)20 7 334 3811 e zholder@rics.org Asia

THE RED BOOK Launch of the new edition of the RICS ‘Red Book’. From left: Ben Elder, RICS’ Global Director of Valuation; James Harrison, Property Life’s Commercial & Finance Officer; David Faulkner, Member, Professional Board of the International Valuation Standards Council, and Executive Director, Valuation and Advisory Services Asia, Colliers International; and Bill Jones, Director, RICS ASEAN.

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www.propertylife.asia

Room 2203, 22/F Hopewell Centre Wanchai,Hong Kong t +852 2537 7117 f +852 2537 2756 e ricsasia@rics.org, www.ricsasia.org For more information RICS, visit www.rics.org

FEATURE S EPTEMBER— OCTO BER 20 1 2

Capital gains Despite slowdown, Malaysia offers an attractive market for investors. By Rodel Ambas Jr.

PHOTO COURTESY OF TOURISM MALAYSIA

W

ELL-REGULATED would best describe Malaysia’s real ­estate market. With the exception of Singapore, the country is perhaps the most liberal in South-East Asia.

In fact, in Jones Lang L­aSalle’s 2012 Global Real Estate Index, ­ Malaysia ranked 23rd globally and ­ categorised a transparent property market, ahead of Japan, although notches below Hong Kong and Singapore. And despite global economic uncertainties, Kuala Lumpur’s residential property ­ markets continued to perform well in 2011, and carried the momentum into 2012, albeit at a slower rate.

But many experts quite agree that activity in Malaysia’s high-end condominium market is expected to slow this year, in line with the overall cautious a­ pproach of the market. D ­ evelopers at the moment adopt a wait-and-see a­ ttitude and many are expected to promote and market their products to gauge d ­ emand before officially launching them.

But despite this, the stability of ­ alaysia’s property market, which is lackM ing in neighbouring Indonesia’s, has lent it the boost it needed to attract foreign buyers. Its relative ­affordability compared to Singapore and Hong Kong meanwhile has been a major selling point.

According to IP Global CEO Tim Murphy, ‘Malaysia is a sensible market and tends to perform more steadily than the rest of Asia…its property market is well regulated, such that speculators can’t buy and sell quickly, so it doesn’t tend to create a boom-and-bust scenario. That’s why we’ve seen 5.3% growth in the past 19 years.’

Murphy goes on to explain that the reason for this is because Malaysia’s property market is ‘driven by owner occupiers and domestic consumption and not pure rampant speculation like the rest of Asia’.

Within Malaysia, Kuala Lumpur is the key investment location with several global companies relocating to Kuala Lumpur due to its relatively low operating

FEATURE S EP T EM B ER — O C T OBE R 2 0 1 2

PHOTO COURTESY OF MAH SING GROUP

PHOTO COURTESY OF OSK PROPERTY

and purchase costs. But despite this, the Malaysian capital continues to experience a shortage of supply, especially in the mid to luxury condominium market.

As a result of low supply, there are currently 6.5 people living in every property in Malaysia, which is relatively high compared to Hong Kong’s 2.8 and Singapore’s 3.2. And given the trend in developed countries for smaller ratio of population per housing unit, one can expect that over time Malaysia will see this ratio decline as demand for housing increases.

Malaysia’s demographic profile, too, will help boost its property market. According to Murphy, half of Malaysia’s population is under the age of 35, and this group is typically very aspirational and actively seeks out properties to rent or buy.

‘This is good news for property investors as it translates into strong rental demand and a high number of potential buyers.’

In July 2011, the Malaysia People’s Housing (PR1MA) Bill 2011 was launched to assist medium-income earners pur-

PHOTO COURTESY OF OSK PROPERTY

URban CHIC OSK Property’s Mirage Residence (right and bottom left) was launched this year and due to be completed by end of 2014.

Mah Sing Group’s Icon Residences Mon’t Kiara (above left).

chase their first homes. Developers have teamed up with the PR1MA scheme, switching from high-end developments to mid-range ones to lure first-time buyers with easier financing and reduced stamp duty for houses below US$126,418 (MYR400,000). Borrowers with a monthly income of up to US$2,212 (MYR7,000) per month qualify for the scheme.

Business confidence in Malaysia is also at an all-time high. Goldman Sachs recently called the Malaysian economy ‘a safe haven in an uncertain environment’.

The Organisation for Economic and Cooperative Development (OECD) forecasts that Malaysia’s GDP will expand by 5.3% annually in the next 4 years. Meanwhile, foreign direct investment to the country

rose by 43% in 2011, resulted in AT Kearney ranking Malaysia as the world’s 10th most attractive FDI destination.

Capital values and rental values remained generally stable in the first quarter of this year. However, with the introduction of new condominiums with innovative designs and ‘value adds’, which command a premium, there was an overall increase in both capital and rental values.

With the greater increase in capital values compared with rental rates, the average yield for high-end condominiums slightly compressed to 5.0% in the first quarter of 2012 compared with 5.2% in the fourth quarter of last year.

Outlook As construction cost increases, prices of new launches will effectively continue to increase. To justify price ­increases, developers are expected to be more creative and introduce new designs and features, link up with hotel brands and obtain green building certification. Market prices and

AFFORDABLE LUxury The majority of units in Mah Sing Group’s M City are considered small (506 to 1,018 square feet) which means they are more affordable and attractive to local investors.

PHOTOS COURTESY OF MAH SING GROUP

rentals are generally expected to consolidate in 2012.

A report published in The Star stated that close to 2,600 high-end condominiums are scheduled for completion in Kuala Lumpur this year. Hence, the outlook for the luxury condominium m ­ arket in the Malaysian capital is ­expected to be challenging. Developers offer all sorts of attractive incentives such as rebates, discounts and a ­limited period of free maintenance fees to drive sales.

There was also plenty of talk late last year that Malaysian property prices will head south in 2012 after the steep rise in the residential sector over the past few years. So far, this remains to be seen.

Projects launched this year In the first quarter of this year, Mah Sing Group launched one high-end development, M City, located on J­ alan Ampang

(approximately 8 km east of the city centre). This leasehold d ­evelopment comprises 500 units within one block of 35 storeys. The majority of units are considered small, ­ between 506 and 1,018 square feet, which means they’re more affordable and, therefore, a­ttractive to local ­investors. The d ­ eveloper offered a 5% price discount and a developer interest bearing scheme to purchasers and achieved a 90% sales rate.

Another project launched this year is OSK Property’s Mirage Residence in KLCC. Located in Jalan Yap Kwan Seng, this ­25-storey, freehold residential development has 102 units that range in size from 850 (studio) to 1,800 square feet (three bedrooms), which cost at an average of US$380 (MYR1,200) per square foot. The project is expected to be completed in late 2014.

Another is the first phase of the Plati-

num Victory Face Project in ­Jalan Sultan Ismail. This freehold, fully ­furnished luxury condominium boasts of 733 units in a 51-storey building. ­Designed with the SOHO (small home office) concept, units range in size from 850 to 1,490 square feet.

Other upmarket condominium projects that were launched this year included Verdana @ North Kiara (Phase 1), Icon Residences Mont’ Kiara, ­Laman Ceylon, 188 Suites, St John Woods Residence, and Rimbun Condominium.

Meanwhile, projects scheduled for Residensi completion this year include ­ Kia Peng, The Pearl @ KLCC, Crest ­Jalan Sultan Ismail, Setia Sky ­Residences Phase 1A (Boheme Tower), St Mary Residences, Verticas Residensi (Towers A, B and C), Suasana Bukit Ceylon, 9 Madge, Amarin Wickham, Gaya Bangsar, and Matahari Desa Sri Hartamas.

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Why invest in Sydney New South Wales’ capital boasts world-class universities, increasing population and strong economy, which make it a good property investment destination.

Š SXC.HU / SCASHA

FEATURE

banks, more than half of Australia’s top companies, and the regional headquarters for around 500 multinational corporations. The city is home to 65% of Australia’s Asia–Pacific regional headquarters and 45% cent of its largest companies by revenue.

With an estimated 20.5% of Australia’s total population, Sydney is the hub of New South Wales and the powerhouse of Australia. The city’s attractiveness has

Beautiful Sydney A view of Sydney Harbour from Circular Quay.

sent population numbers soaring and is expected to grow by 1.6% annually between 2011 and 2031. With the population expanding to 5.3 million and average household sizes anticipated to fall from 2.65 to 2.36 persons per private dwelling by 2031, this growing demand should continue to push property prices up over the long term.

The preference for the majority of Sydney-siders is to move closer to the central infrastructure, CBD and public transport, and be nearer to the beach or harbour.

According to the Real Estate Institute of New South Wales, rental vacancies spiralling down to the current 1.8% reflects the demand for rental properties. The New

© SXC.HU / SCASHA

A

ustralia’s most famous city is also considered to be one of the most beautiful in the world and home to 4.58 million people. Aside from its iconic opera house, Sydney is also famous for its stunning natural harbour (arguably the most beautiful natural harbour in the world), its beaches (think the infamous Bondi Beach), and the successful host of the 2000 Olympic Games.

Sydney is the largest corporate and financial centre in Australia and is also an important financial centre in the Asia–Pacific. The Australian Stock Exchange and the Reserve Bank of Australia are located in Sydney, as are the headquarters of 90

FEATURE S EPTEMBER— OCTO BER 20 1 2

© SXC.HU / TIMODEPImo

South Wales state government already has the Sydney Metropolitan Strategy in place to reach this level of demand and has identified many key areas where there will be large-scale development in housing and infrastructure.

Of course Sydney also boasts worldclass universities, which attract a huge number of off-shore students, including Singaporeans. Students from around the world flock to University of New South Wales, University of Sydney, Macquarie University and University of Technology Sydney. It makes a lot of sense to purchase a property in this world-class city to house your children whilst studying here, as well as of course investing in a strong property market which should offer strong returns over the long term.

According to the 2012 report of the Urban Development Institute of Australia, New South Wales has the biggest gap between housing supply and demand of all Australian states, with an estimated 25,000 homes needed every year to fulfil underlying demand.

Bondi Beach Sydney’s most famous stretch of sand.

Key property investment benefits for Sydney ❶ Australia’s corporate and financial centre ❷ High demand for rental properties ❸ Strong economic fundamentals

25%

Percentage of Sydney’s contribution to Australia’s GDP

❹ High population growth ❺ World-class universities ❻ Huge gap between supply and demand

This gap, combined with population increases of approximately 78,000 people per year, a doubling of the first home owners grant to US$15,440 (A$15,000) (for new/off-plan homes) from October this year, and a new US$5,146 (A$5,000) grant for investors (including foreign investors), bodes well for steady growth in both property prices and rental yields over the medium to long term. And that folks – strong capital growth and rental returns – is what successful property investing is all about!

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Safe haven The global downturn might have dampened buyers’ sentiments (and their bank accounts), but Singapore’s high-end property market is as hot as ever. By rodel Ambas Jr.

L

ong considered SouthEast Asia s financial centre, Singapore is the epitome of efficiency, wealth and cosmopolitanism. Located at the southernmost tip of the Malay

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WWW.PROPERTYLIFE.ASIA

Peninsula, the city-state might be one of the most densely populated places on earth. But what it lacks size, it makes up for in a rich mixture of culture brought about to by its multi-ethnic population.

Singapore is also considered the poster child of the success of autocratic form of capitalism. The city-state is the world’s third wealthiest, after Qatar and Luxembourg, in terms of GDP per capita (US$59,711 according to the International Monetary Fund). It also ranks highly in many indicators of socio-economic performance, such as liveability, standard of living and public healthcare spending.

So wealthy is this tiny state that its property market is also one of the world’s most attractive. Driven by an efficient legal system, impeccable infrastructure, and a strong and stable economy, Singapore properties are one of the world’s priciest (average US$16,350 per square metre). Foreign buyers, from the UK, the USA, China, Indonesia and France, take long-haul flights to the city-state to snap up hot properties, either as a second home or an investment.

According to Knight Frank, the value of real estate in Singapore increased 50.5% from the last quarter of 2006 to the same period in 2011. It also ranks as the

third most expensive city to rent high-end property in Asia in 2011, after Hong Kong and Tokyo, according to research firm ECA International. Low interest rates and a wave of immigration in recent years (almost one-third of the city-state’s 5.2 million people are composed of foreigners) have boosted demand for homes, which in turn helped drive prices.

Public rumblings over soaring property prices has led the government to implement measures to cool the market. In December of 2011, foreign property buyers were hit with an additional buyer’s stamp duty (ABSD) equal to 10% of the property value. This has contributed to property prices marking their first quarterly fall in

CApItAlISt, CrOWded And CleAn Singapore conjures an image of progress and efficiency that few cities on earth can rival.

PHOTO COURTESY OF SINGAPORE TOURISM BOARD

nearly three years of 0.1% in January to March this year.

Despite the cooling measures introduced by the government, Singapore’s luxury property market remains resilient as the wealthy still see the city as a safe place in which to park their assets. According to The Wealth Report 2012 by Knight Frank, high-net-worth individuals favour Singapore as the location of their second home, after the USA, UK, France and Spain. And as far as quality of life is concerned, Singapore comes in second after London.

buYers’ shiFt In a report published on iProperty.com, JTResi managing director Jerry Tan said that foreign buyers of Singapore properties nowadays are owner occupiers. ‘[These] foreigners buying luxurious condos in Singapore tend to do so with a view to occupying them for a few months in a year.’ He added that these foreigners are drawn to Singapore’s vibrancy, its integrated resorts, and lively arts and cultural scene.

WWW.PROPERTYLIFE.ASIA

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International rankings of Singapore 1st ECA International:

Location Ratings Survey 2010

1st World Bank:

Ease of Doing Business Index 2011

2nd Wall Street Journal:

Index of Economic Freedom 2008

3rd World Economic Forum:

Global Competitive Index 2009–2010

4th Economist Intelligence Unit’s Asia Most Liveable City Survey

29th World Tourism Organisation: World Tourism Rankings

A buyer’s guide to Singapore Although many Asian buyers of Singapore properties are known to pay for their purchases in cash, expats can still arrange a mortgage in Singapore, especially if the leasehold term is for 99 years or longer.

However, a deposit of at least 30% is likely to be required and, even then, the buyer needs to produce proof of earnings. The buyer’s credit history will also be examined.

It is also possible to get a mortgage agreed in principle before the hunt for a home, which is a sensible move if budget is a major concern.

Fees and taxes Stamp duty is perhaps the biggest cost to consider when buying a home in Singapore. The amount paid is calculated on either the purchase price or the estimated market value of the property. ❶ Every S$100 or part thereof of the first S$180,000 – S$1 ❷ Every S$100 or part thereof of the next S$180,000 – S$2 ❸ Every S$100 or part thereof of the remainder – S$3 For ease of calculation, if the purchase price is more than S$300,000, stamp duty payable will be 3% of purchase price minus S$5,400.

‘Singapore may be a stop for highnet-worth [individuals’] travel patterns throughout the year along with London, New York, Shanghai and Sydney. Some are also buying for portfolio diversification.’

As speculative and investment demand take a back seat, the luxury market is still appealing to buyers who aim to live in the properties, said Tan. For example, Tan’s JTResi brokered the sale of a three-bedroom apartment at The Orchard Residences at about US$3,837 (S$4,800) per square foot or nearly US$6.95 million (S$8.7 million) to a young East European couple who intends to occupy it for two to three months in a year. The firm also brokered the sale of a 3,003-square-foot four-bedroom unit at The Marq on Paterson Hill at a record price of US$4,767 (S$5,842) per square foot to a South-East Asian tycoon who plans to live in the apartment during his visits to Singapore.

Foreign funds Last year marked a historical high for foreign property buyers in Singapore, led by mainland Chinese, Malaysians, Indonesians and Indians, according to property consultancy Savills Singapore.

Compared to all other foreign buyers, Indonesians had generally larger budgets, dominating the Core Central Region.

As the number of both Malaysian and Indian buyers increase, their budgets have also grown bigger.

Mainland Chinese topped all foreign purchases with 28%, followed by Malaysians (20%), Indonesians (18%) and Indians (12%).

‘Mainland Chinese bought the most private homes in the outside Central Region (OCR) (31% of all foreign purchases in the OCR), followed by Malaysians (22%),’ noted Savills.

In the rest of Central Region, mainland Chinese were also the top buyers at 27%, while Malaysians followed close

After the boom Singapore’s mass-market housing soared following the global financial crisis in

2008. Analysts expect this segment to fall the hardest due to an oversupply of new homes over the next two years. According to the Urban Redevelopment Authority, a little over 32,000 new units will be completed in 2013 and 2014, which is 85% more than the number of units slated for completion in 2011 and 2012. Most of these new apartments being constructed fall into the mass category.

According to Lock Mun Yee, a property analyst at Singapore-based DBS Vickers, although Singapore property prices overall are expected to fall 5% in 2012, there is not that much new supply coming into the luxury segment, which means the price drop in this segment will be less.

Nicholas Mak, head of research at SLP International, agrees. ‘The high-end segment did not grow as aggressively as the mass market, so the drop may not be as bad.’ A relative lack of supply of these

Additional Buyer’s Stamp Duty In December 2011, the Singapore government announced that an Additional Buyer’s Stamp Duty (ABSD) will be imposed on certain categories of residential property purchases. The ABSD will be imposed over and above the current Buyer’s Stamp Duty, and will apply to the purchase price or market value of the property (whichever is higher) for the following purchases: ❶ Foreigners and non-individuals (corporate entities) buying any residential property will pay an ABSD of 10% ❷ Permanent Residents (PRs) owning one and buying the second and subsequent residential property will pay an ABSD of 3% ❸ Singapore Citizens (Singaporeans) owning two and buying the third and subsequent residential property will pay an ABSD of 3%

Other taxes There is no such thing as capital gains tax on property in Singapore, but the buyer will be liable to pay stamp duty once again if he or she comes to sell within three years of purchasing the property.

This is known as Sellers Stamp Duty and, again, the amount paid is calculated on a sliding scale, as follows: ❶ If selling within the first year of purchase, the full stamp duty rate (as listed above) will be imposed ❷ If selling within the second year of purchase, you will be liable to pay two thirds of the full stamp duty rate ❸ If selling within the third year of purchase, you will be liable to pay one third of the full stamp duty rate PHOTO COURTESY OF SINGAPORE TOURISM BOARD

behind with 20%. In the core Central Region, foreign buying was dominated

by Indonesians at 30%, while mainland Chinese claimed 20%.

The research noted that the leading foreign buyers showed varying investment preferences and purchasing powers over the years.

‘More particularly, their buying behaviour will likely be impacted by the new property measures implemented on 8 December 2011, although in differing degrees,’ it added.

While transaction volumes and price growth have slowed down, selective buyers, many from China and Indonesia, continue to snap up niche upmarket properties in tony areas like Sentosa Cove and in luxury districts like Orchard Road.

The buyer will also be liable to pay an annual property tax, as well as income tax, if you rent the property out.

master-planned Singapore's Marina Bay is designed to ensure that the area remains vibrant round the clock.

PHOTO COURTESY OF LAFE CORPORATION

PHOTO COURTESY OF CANARY LAND

Investment potential

Because many Singapore residents rent their home, the investment potential in the city-state is very promising. However, landlords are responsible for ensuring that their tenants have the legal right to be living in Singapore in the first place. Having an airtight tenancy agreement in place is an absolute necessity.

The landlord also needs to pay income tax on any rental income earned.

In terms of capital growth, it depends on what happens to the local economy. However, being stable and because the Singapore government is very good at spending money where it is needed (a factor that has contributed to such efficient public transport and the high standard of living), this means that the city is very likely to promise only economic and political stability.

PHOTO COURTESY OF HAYDEN PROPERTY

UNFAZED Banking on Singapore's safe-haven status and overall stable economy, developers recently launched high-end residential projects, aimed primarily at foreign buyers. These include The Residences at Emerald Hill by LAFE Corporation Limited (top), KOP Group’s Hamilton Scotts (above right) and Canary Land’s The Lush.

high-end homes provides a floor to prices. People are still looking, but they’re being selective. This behaviour only shows that, in a slow market, prices of better-designed and well-located projects hold better. The price tag, of course, depends on the size, location and how good the view is.

Properties at the busy Core Central Area are commanding high prices, as well as those that offer stunning views of the South China Sea in Sentosa Island.

At the same time, demand from foreigners is not expected to abate in the near future. Foreign interest in Singapore’s high-end property will remain strong over the coming years as Asia continues to grow.

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Own Singapore’s finest Few cities can boast of Singapore’s fascinating brew of cultural legacy and modernity.

Here you can find yourself walking along a quaint, tree-lined street. To your left are colourful terrace houses that stand as testament to the city’s rich, historic past. A few paces along is a wellmanicured park for those in search of a quiet corner. Then a couple of turns will take you to a vibrant spot, testament to the city’s stunning modern edge.

Often described as a colourful mixture of cultures, Singapore has been an important trading post since the second century. Years of migration left the city with a strange yet interesting mix of Malay, Chinese, Indian and Western flavours. Unsurprisingly, Singapore is peppered with many historic and culturally important sites – one of which is the quaint Emerald Hill.

For many years, Emerald Hill has captured the imagination of poets and artists. Formerly home to many members of Singapore’s wealthy Peranakan Chinese community, the area’s interesting structures feature Chinese Baroque architecture, which provided the perfect setting for many of acclaimed Singapore writer Goh Sin Tub’s well-loved short stories.

Located at the north-western section of Singapore’s Downtown Core, the area was given conservation status on 7 July 1989,

mainly due to the numerous old, colourful Peranakan terrace houses built in a variety of architectural styles – from Transitional to Art Deco. An attractive yet quiet residential area where commercial areas are just a stone’s throw away, Emerald Hill will be the site of LAFÉ Corporation’s first foray into luxury residential development: The Residences at Emerald Hill.

Boasting of 33 very exclusive townhouses and apartments, The Residences prides itself for being one of the last pieces of verdant, green properties in a midst of the exciting Downtown Core. Exclusive and cosy, its apartments are large, ranging from 1,006 to almost 7,000 square feet, and ideal for growing families.

According to LAFÉ Corporation’s Ruby Lee Yen Kee, the choice of Emerald Hill was an easy one. ‘Developing this piece of prime and historic part of Singapore is something we would love to be part of.’

There are many areas in Singapore that were put on sale and acquired by other developers, but LAFÉ Corporation chose to be part of Emerald Hills’ interesting transition. ‘We’ve always believed that we should always select sites that offer history and heritage,’ says Ms Lee. The Residences is also designed in a way that it blends seamlessly into its very interesting surroundings. ‘Maintaining Emerald Hill’s Conservation Status is of utmost priority,

and we at LAFÉ Corporation made sure that The Residences will become a part that will help preserve and enhance the area’s iconic surroundings, not upstage it.’

As an exclusive community, residents can expect a host of exciting concierge services few Singapore properties can boast, from arranging cleaning services and picking up clothes from the drycleaners, to organising kids’ birthday parties. ‘We offer very customised service, which is an added value.’

But the property’s centrepiece is its townhouses. Almost like landed properties, with their own underground parking lots and rooftop swimming pools, they’re very exclusive and self-contained, a pleasant surprise considering they’re located near the exciting and busy Orchard Road. Foreign buyers, too, are in a real treat. Since The Residences’ townhouses are almost like a landed bungalow – quite an anomaly in Singapore. ‘In a sense, it’s as if you’re buying a landed property,’ says Ms Lee. ‘As foreigners are not allowed to buy land in Singapore, The Residences offer something very unique. Having a piece of Singapore to call you own.

For more information on The Residences at Emerald Hill, visit www.lafecorporation.com.

Credo Hotline (+65) 83803223

Why invest in UK student accommodation

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n today’s world with negative returns from cash on deposit, an ever-present threat of a banking collapse, a not-so-promising outlook for equity markets, and a lack of confidence in the world’s major economies, what investment options are out there?

© SXC.HU / SWONSON

Despite the global downturn, the UK’s student accommodation market is performing remarkably well. Now then is the time to take advantage of this resilient – not to mention profitable – sector. By James Norman

The theme of today’s article is student accommodation – namely, UK student accommodation.

In broad terms, there are three types:

1. PRIVATE APARTMENTS Appealing to post-graduates, mature students and overseas students, these traditionally command high rents.

2. CONVERTED RESIDENTIAL HOMES These usually have three or more bedrooms. Reception rooms are frequently converted into bedrooms to increase rental income.

3. PRIVATE HALLS OF RESIDENCE Usually a cluster of apartments with shared kitchen and bathroom facilities (some bedrooms have ensuites). Traditionally, these command the highest rents, are usually managed on-site, and are the most hassle-free type of student property investment.

why invest in UK student accommodation and what are its pitfalls?

There are over 165 universities and higher education institutions throughout the UK, and along with them an ever-expanding number of university towns and cities. Despite rising university fees, the number of individuals attending universities is expected to increase over the next decade as people choose to invest in their future rather than struggle to get a job.

In contrast, commercial property investments have been hit hard by the economic downturn. Student accommodation is, therefore, seen as a great defensive investment. In many locations, student numbers far outstrip accommodation places, resulting in rents rising annually, equalling or even outstripping inflation depending on location. Occupancy rates of student accommodation are usually positive compared to traditional buy-to-let properties because students need to plan in advance to have a place to stay for their years of studies.

In addition, new properties for rent are often advertised by universities long in advance, usually every January. This ensures your next year’s rental is secured long before the existing tenants move out in July. It’s also common for parents to act as guarantors, who provide assurance that rent will be paid. Worth noting is the fact that income is usually higher with student accommodation as rent is often paid on a per-room basis rather than per property.

However, international investors, especially those based in Asia, should note that there certainly are some pitfalls to consider. First, student accommodation often experiences more wear-and-tear compared to standard family- or professional-inhabited buy-to-

lets, requiring more regular maintenance. Mortgage lenders, too, may often be more restrictive if you’re based outside of the UK. Some even restrict the type of tenant you can take. For Singaporeans buying private halls of residence, it’s often impossible to purchase single rooms; rather you need to purchase a whole unit outright – without a mortgage.

As with all property investment, research is paramount when looking at investing. The old adage ‘location, location, location’ cannot be more true with student accommodation. Rental yield, rather than capital appreciation, is the primary reasons for investing, so ensure you do your sums. If you can get a mortgage, post-financial crises, lenders often require up to a 25% down-payment in addition to large arrangement fees.

Rates, too, can be more expensive than residential rate deals. As with all buy-to-let rentals, your rent is never guaranteed, so you need to consider if you can afford for your property to sit empty for 1–2 months or perhaps more, certainly during the summer months.

However, if your tenant doesn’t pay on time, rental guarantee insurance can help in this instance and is available at US$79+ (£50+) per month.

What other ways can you access student accommodation investments?

Increasingly popular amongst our clients are student accommodation funds. These are specialist collective investment funds that provide exposure to student accommodation, but also residential ground rents and revisionary property. Their strategies involve acquiring purpose-built student accommodation in the best locations that offer quality accommodation at affordable rents whilst still producing an income yield.

Most of the funds have long-term relationships with universities and are known to achieve 100% occupancy rates. You also get the experience and expertise of the company employees, including experienced investment managers, specialist property asset managers and fund administrators. Hence, if you’re not a property expert yourself, they undertake the legwork for you.

These specialist funds have delivered constant returns of 8–10% per annum, with low volatility, since the early 2000s. Funds are usually pound denominated, but are also now available in Singapore dollar, US dollar, euro and Swiss franc. They also employ currency hedging to mitigate the risk of foreign currency fluctuations.

These funds have a characteristic income instrument, but are not sensitive to interest rates or the property market, giving a stable capital value and predictable cash flows. These seem attractive at the current time where short-term interest rates are low due to the difficulties of investing in physical property.

James Norman is a columnist with 8 years’ experience in finance. He obtained his BSc degree in Economics and Finance from Southampton University, and has been based in Singapore for nearly 18 months where he’s been working as a qualified Wealth Management Consultant for The Henley Group. To share your views with James or to find out more about him, email jn@thehenleygroup.com.sg.

The UK property market

UP AND COMING Waterfront buildings in University Campus Suffolk in Ipswich, one of England’s newest universities. © SXC.HU / JPKSO

at a glance T he UK has much to offer with its multi-cultural society, a history that goes back thousands of years, and beautiful countryside and tourist destinations.

The culture of home ownership has also ensured that demand always seems to outstrip supply in the UK, thus making the country’s property market one of Europe’s most vibrant.

The country has a net immigration policy that, as well as ensuring that the UK population and economy continue to prosper, should also bring in more potential homebuyers – thereby keeping demand fairly high. Statistics show that the country’s population is expected to increase from the current 62.3 million to 67.2 million by 2020 and to 73.2 million by 2035.

Its cities such as London, the property markets continue to attract the big movers and shakers, although areas such as the North of England and Scotland attract homebuyers due to lower pricing and masses of tourists.

The UK property market is split between the North and South of the country – where living costs also vary wildly. As more people look to work from home, or online on the move, the necessity to live in the main areas of the economy – such as London – is reducing.

Although property prices have dropped across the board in the UK over the past 3 years, the market is showing signs of recovery.

According to the Office for National Statistics, across England, for instance, there was a 2.6% rise year-on-year, where typical sales stood at US$375,000 (£237,000). And many property experts tip that about now is the time to consider investing whilst property prices are relatively low and exchange rates are most favourable for foreign investors.

Of course UK universities are attracting high numbers of foreign students especially since the exchange rates are now more favourable. Student accommodation can also offer excellent rates of return with yields from 7% to 10% and capital outlay for this type of accommodation is relatively low.

Being a global financial centre, a major player in the world’s political stage, and a cultural and historical country, the UK’s property market is so diverse that there are all sorts of properties – be it chic apartments in Central London, charming cottages in Kent, or even a castle in the Scottish Highlands – are available for every investor. However, as with investing elsewhere, property buyers should practise caution when approaching the country’s real estate market.

But investors are assured that being one of the world’s most transparent and mature property markets, the UK is a safe place to invest. In addition, the exchange rate between the British pound and many Asian currencies are quite favourable at the moment, which means that many Asian home buyers could get plenty of great deals in the UK.

Introducing

Liverpool

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hanks to The Beatles, Liverpool is one of the UK’s most popular cities and the country’s sixth most visited. Named Europe’s City of Culture in 2008, the city boasts historic UNESCO World Heritage-listed waterfronts and docks and newly developed shopping centres, including ‘Liverpool One’, which is teeming with great shops and nightlife. Its once grotty warehouses, having been transformed into chic shops, cafés and fancy apartments, are a major attraction as well.

Hence it is not surprising that Liverpool is also popular among students. To put this into perspective, Liverpool hosts more than 80,000 students a year. One of its universities, Liverpool John Moores University, received 57,241 applications in 2010 alone. Meanwhile, the prestigious University of Liverpool has over 23,000 registered students, nearly 18,000 of them full time. The city is also very popular with medical students, including those from overseas – many of whom attend the Royal Liverpool University Hospital.

A huge rise seen in the inflow of international students into Britain will also see Liverpool’s student population increase over the next few years. A recent study by the British Council shows that the number of international students enrolling in UK universities will increase 10% by 2020, or equal to an increase of 30,000 students. Liverpool, as a city closely linked with popular culture, is expected to be popular with international students.

With student accommodation fast becoming one of the UK’s most popular investment opportunities, many of the country’s traditional college towns are experiencing property investment boom and Liverpool is no exception. Hence, this is the perfect time for property investors to take advantage of current investment conditions.

In a report published in The Liverpool Daily Post, investors are shelling out around US$80,000 (£50,000) per room in new developments, as Liverpool’s city centre student accommodation boom continues to gather pace. The story also noted that almost 5,000 new student rooms have been given planning permission in the last years, including 2,200 in the past two months alone.

According to Liverpool’s planning chairman John McIntosh, the city’s student accommodation explosion is the new ‘gold rush’.

Now that many students are looking for high-quality apartments and are willing to spend more for good locations, modern accommodation in prime locations with easy access to the universities is what students are looking for and the demand has become an important strategic plan for all universities.

Landlords, too, are increasingly aware of students’ rising standards and many offer more attractive deals, such as rental packages inclusive of utilities and internet.

RED BRICK UNIVERSITY University of Liverpool’s Victoria Building. © SXC.HU / JA_KEMP

Chatham Place

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s the student accommodation sector becoming a major driver of the UK’s property market, the country’s many traditional college towns are experiencing a property investment boom. And Liverpool is poised to take advantage of this phenomenon.

This is therefore a perfect time for property investors to capitalise on this favourable investment condition.

Property manager Urban Student Life and developer Russells Construction are therefore delighted to present potential investors with this fantastic opportunity to enter the student accommodation sector: the chance to purchase one or more units at Chatham Place Student Halls in Liverpool.

THE ACCOMMODATION Chatham Place Student Halls comprise of 354 units, each individual unit offered for sale consists of a deluxe student bedroom and en-suite bathroom. The cluster units (apartments) comprise of 4-, 5-, 6-, 7- and 8-bedroom units, spread across the fivefloor building, each equipped with a communal kitchen and dining area.

The size of each room is 12.5 square metres, big enough to house a single bed (though there is enough space for double), fitted wardrobe, workstation, shelves and drawers, and an en-suite bathroom. The rooms are also equipped with telephone and data points and have WiFi internet – in short everything a college student needs.

The residences’ communal area boasts fully fitted kitchen/diners, including a breakfast bar and integrated kitchen appliances, staffed reception area, high-speed Wi-Fi internet, cleaning and laundry facilities, printing and photocopying services, café area with vending machines, coffee counter and seating, lounge area with games room, quiet rooms for study, a prayer room and a gym.

For the energy-conscious student, the residences’ utilities include solar panels, energy-efficient heating, water-saving taps, under-floor heating and sensor lights.

LOCATION Chatham Place is located immediately behind the University of Liverpool’s main campus, providing easy access to the property for thousands of students. The building is also conveniently located opposite a Tesco superstore.

SCHOOL BOUND An artist rendering of Chatham Place (top), which will sit beside the University of Liverpool.

A typical single-occupant student pod (below).

The building is expected to increase in value by 4% each year whilst rents also continue to rise and costs decrease, which means it’s an excellent investment.

MANAGEMENT AND DEVELOPER Chatham Place’s property manager Urban Student Life (USL) offers students a new way of living whilst they study. As living away from home for students, both UK and from overseas, can be both exciting and overwhelming, USL’s ‘Student First’ charter puts students at the centre of everything it does – building vibrant, support-

ive communities to ensure that students can live and study with confidence and success. USL-managed properties provide purpose-built, secure, top-quality, fully equipped student accommodation with a hotel style, concierge services and a welcoming active community.

Its developer, Russells Construction, is one of the North West of England’s most recognised main contractors. With a portfolio spanning the commercial, industrial, retail, leisure and residential sectors, Russells has the experience and expertise to deliver virtually any scheme, on time and on budget. Their clients include Holiday Inn Express, B&Q, Vue Cinemas, Pizza Hut, Morrisons, Alliance, LPC Living, Aldi and The Peel Group.

Investment breakdown Purchase price: US$81,650 (£51,500) Unit: One-bedroom deluxe student pod with en-suite bathroom

9.7% (US$7,930 or £5,000 per annum), assured for the first two years

Net yield:

Type of investment property:

Fully managed, hands-off opportunity Capital growth: 4% per annum Rental growth: 2% per annum (on

average)

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RESERVATIONS ESSENTIAL Student property is fast becoming one of the UK’s most popular investment opportunities. With UCAS (Universities and Colleges Admissions Services) reporting a 22% rise in applications for 2011-2012 and with a huge national shortage of student accommodation; this is the perfect time to take advantage of current investment conditions.       

Purchase price: £51,500* Top quality, hotel style student accommodation 1 bedroom deluxe student pod with ensuite Net Yield: 9.7% (£5,000 per annum) assured for first two years** Fully managed hands off opportunity Located only 1km from one of the UK’s largest University Campus’ Well appointed communal areas with comprehensive facilities **As per Sale & Purchase agreement

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Higher earnings A look at the UK’s best performing student housing markets. By Rodel Ambas Jr.

© SXC.HU / AIDAS85

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COLLEGE LIFE More than 22,000 students are enrolled in the University College London (above), one of the UK capital's 40 institutions of higher learning. Bristol (below), where the Universities of Bristol and of the West of England are located.

© SXC.HU / DARR

he UK is one country well-positioned to take advantage of the student housing boom. Known for its prestigious universities, every year thousands of Asian students – mostly from China, India, Hong Kong, Malaysia and Thailand – pack their bags and head to the UK’s many universities to spend 3 or more years to earn a college degree.

These kids will need some kind of accommodation, mostly from private operators, as universities often are not equipped to house them all.

According to James Pullan, Knight Frank’s Head of Student Property, the customer base for purpose-built accommodation in the UK includes a very high proportion of overseas students. ‘We foresee this demand continuing to grow as global student mobility increases further still.’

Overseas students have a high tendency to choose purpose-built accommodation in the UK, for a variety of reasons, including security, location and facilities. Specialist providers of accommodation are certainly in a position to help support the requirements of these students.

In its 2012 Student Housing report released in June, UK property consultant Savills says that although student housing is a maturing sector, it has performed well despite the global economic downturn. In fact, it has outperformed other commercial property asset classes in the UK. Says Pullan: ‘A key reason for this outperformance is that there is still a structural undersupply of purpose-built student accommodation in the UK.’ The most undersupplied of which is London, having the most number of institutions and the highest number of foreign-student admissions.

Limited supply coupled with a growing global interest in the UK’s educational excellence points towards further strong rental growth in the sector. As of 2012, the UK has five of the world’s top 20 universities according to the QS University rankings. France and Germany have none.

And the number of international students heading to the UK is set to increase faster than anywhere else in the world, save Australia. A recent study by the British Council shows that international student numbers are expected to rise by 10% over the next decade, which is equal to an increase of 30,000 students enrolling on British university courses.

‘Despite controversy over fees, loans and available places, the buy-to-let student sector continues to grow, and in many areas is outstripping mainstream housing by growth, demand, value and yield,’ says Samantha Bade of FindaProperty.com.

The student housing sector therefore offers plenty of opportunities to the savvy investor. There is steady supply of students marching to UK college towns every year, and if you can pick up a bargain, the rental yields could be impressive.

ten UK college towns/cities that offer the best yield LONDON The Knight Frank Student Property Index shows that the total returns for student property in London climbed to 15.1% in September 2011, up from 8.4% in the previous year. The capital’s 40 institutions for higher learning also enrol more than 290,000 students, about 35% of them from overseas.

OXFORD

BRIGHTON The Universities of Brighton and Sussex, which jointly operate the Brighton and Sussex Medical School, are located in this city in the south coast of England.

It has a student population of more than 25,300, almost 20% of which are from overseas.

EDINBURGH This Scottish city, which has five institutions for higher learning, enrolled more than 46,000 full-time students in 2009/2010, more than 32% of whom are from overseas. Edinburgh also saw its number of students grow by 12.4% from 2004/2005 to 2009/2010.

DURHAM Home to the University of Durham, 21.2% of the city’s full-time students of 14,290 are from overseas. Demand for student housing is very high in Durham – the university can only provide university-owned spaces to 40.3% of its students, leaving the rest looking for accommodation elsewhere.

Being the world’s most prominent college town, Oxford property prices are second only to London: US$364,240 (£230,863) for a two-bed flat, rental prices are steep at US$1,840 (£1,166).

Average yield stands at 6.1%.

MANCHESTER

Liverpool

BRISTOL

Home to more than 80,000 students, the birth place of The Beatles is one of the UK’s most vibrant student housing markets. The city is also associated with everything hip and cool– that is why many Asian students flock to Liverpool every year to study.

Home to the Universities of Bristol and of the West of England, this city in the South West saw its full-time student population increase 18% from 2004/2005 to 2009/2010. About a fifth of its students are also in need of privately owned accommodations.

KINGSTON

YORK

Although home to just one institution – Kingston University – this borough in south-west London is home to more than 21,500 full-time students, and saw its student population grow almost 40% from 2004/2005 to 2010/2011.

The city boasts 17,350 full-time students and great transport links, with London and Edinburgh only a few hours away by train. It also saw its student population grow 27.3% from 2004/2005 to 2009/2010.

There are four universities in the city that cater to more than 79,000 full-time students. With demand outstripping supply, Zoopla’s yield estimate could be on the conservative side.

The student housing sector offers plenty of opportunities to the savvy investor, but here’s a number of things to consider before making the move.

1 Older properties with multiple rooms are a better choice. Also, to boost income, let the rooms on an individual basis, rather than renting the whole house.

2 You may have to spend more on maintenance bills as breakages and disrepair are more prevalent with student tenants.

But on the upside, students aren’t particularly fussy about furnishings so it may cost you little to prepare the house.

3 As students move in and out of college towns every year, it means you have to regularly find new tenants.

4 Obtain a reference from every tenant to be sure they have the means to pay the rent, or a guarantor form if the rent is funded by a family member.

5 Hire a local lettings agent and a team of maintenance people (plumbers and electricians) if you will live far from the property.

This will save you the time and money to travel to the property to do the inspection yourself.

6 Keep on top of the latest regulations. For example, in England and Wales, landlords must protect tenants’ deposits in a registered scheme. If you fail to do so you could be taken to court and fined.

Manila rising Strong domestic demand, a healthy economy and a recent credit upgrade are pushing up the Philippine capital’s property market. By Rodel Ambas Jr.

© FRANZ A.D. MORALES

T

o describe the growth of Manila’s property market as staggering would be an understatement. According to Jessica Mae Go, assistant research manager at Jones Lang LaSalle Leechiu, at the start of the millennium, only around 7,000 units of condominium units were completed. This figure jumped to about 90,000 by the end of 2011.

Go also said that from 2012 to 2016, approximately 154,000 condominium units are expected to be completed, which

is about 1.7 times the housing stock completed between 2007 and 2011 (87,000 units) and almost 9 times that between 2002 and 2006 (17,500 units).

These numbers are a reflection of the Philippines’ improved economic outlook.

According to Claro Cordero Jr., Jones Lang LaSalle Leechiu’s head of Research, Consulting & Valuation Advisory, property prices, too, have also continually increased. ‘Capital values for mid-end condominiums grew by an average of 13% annually between 2004 and 2001, while rents grew an average of 8% annually over the same period.’ It is therefore not surprising to hear people talking of property bubble when one sees this kind of number.

‘Although the danger of a property bubble occurring has always been there, the Philippine capital is not experiencing a bubble at the moment, and we do not think a bubble will occur in the short- to medium-term unless an unexpected shock affects the country,’ says Cordero.

‘The reason for this is that the demand for these residential units is sourced mainly from end-users rather than speculative buyers. Moreover, demand is currently supported by low interest rates, a higher value-added tax exemption ceiling and flexible payment terms.’

Cordero also added that although property prices are rising, they are not likely to drastically shoot up, because of the intense competition in the market at present.

The country’s property boom is being ‘filled’ by genuine demand from end-users, and the market seems able to absorb the incoming supply over the short- to medium-term. ‘Nevertheless, there is a large supply over the next five years, making market positioning and aggressive marketing campaigns crucial for developers if they wish to maintain healthy takeup rates,’ cautions Cordero.

The high growth of the market is driven by the country’s improving economic conditions, such as positive economic growth, record-high remittance from overseas Filipinos, and relatively low inflation and interest rates. ‘As long as the economic environment continues to improve, the property market may be able to sustain growth,’ says Cordero.

In addition, major buyers of residential units in the Philippine capital are primarily end-users, mainly overseas Filipinos.

These Filipinos, having experienced living abroad, are motivated to improve the quality of life of the families they left behind. And one way to do this is to purchase quality homes, notably condominiums, for their families. In fact, according to estimates, a considerable percentage of the remittance of an overseas Filipino to the Philippines goes to real estate (either for house rent or to pay mortgage).

And this trend is expected to increase further. In 2011, remittances from overseas Filipinos grew by 7.2% to US$20.117 billion from US$18.763 billion in 2010.

The country also posted an impressive 6.4% GDP growth rate in the first quarter of this year, the highest in the ASEAN region and the second highest in Asia.

Cordero also said that, despite the supply growth accelerating, take-up levels have remained competitive. Developers are seeing healthy sales rates for their developments, which encourage them to build more projects.

This high take-up is also partly driven the country’s booming offshoring and outsourcing industry (O&O). The growing number of O&O firms, such as call centres and back-office operations, has significantly expanded the mid-end market.

Many of these O&O firms have also established offices outside the traditionally preferred business districts, such as Filinvest Corporate City and Madrigal Business Park in the southern fringe of the metropolis, Araneta Cyberpark in Quezon City, and McKinley Hill in Taguig City. This has led to a frenzy of building in many parts of the capital.

Today there are 18 emerging business districts in Metro Manila, in addition to the three traditional business districts of Makati, Ortigas and Bonifacio Global City. These emerging districts offer a community comprising retail, office and residential projects, which are attractive to both occupiers and developers.

Filipinos’ rising household income, too, is also a major factor to the country’s property market’s growth, thanks to the O&O industry. In fact, according to a report by CNN, so many Filipinos are work-

© Salim Photography/ www.salimphoto.com

ing in this sector that every family has at least one close relative working in one of the country’s numerous call centres. This phenomenon has increased home ownership in the country.

Positive news about the growth of the Philippine economy is also positively affecting the country’s property market.

The bright prospects for continued economic and tourism growth, coupled with the upgrade by credit rating agencies, suggest that local and foreign investors’ confidence in the country has improved.

This heightened confidence is expected to fuel the growth of property-related demand in the short- to medium-term.

However, as with any other developing country, the Philippines faces many challenges to maintain its impressive growth.

According to Cordero, the government will do well to introduce reforms in its educational system. ‘This way the country will be able to produce graduates, not just to match the demand from the O&O industry, but the demands from other developing industries. There is also a need to constantly review the per-

formance matrix in the banking system to ensure a smooth flow of capital and investment from the public and private sectors.’

Another area of reform is the improvement to infrastructure and transportation systems, such as the construction and upgrading of telecommunication infrastructure, link roads (including farmto-market roads to effectively link rural to urban areas), rail systems and overall improvements to the airports to minimise business disruptions.

‘For as long as the economy grows at its current pace, the optimism in the property sector is likely to continue,’ says Cordero. ‘The early gains in the economy should temporarily shield the country from the external economic shocks brought about by the continued slump in the eurozone area and the slow recovery of the US market. The bigger challenge is thus to capitalise on the positive market sentiments in the local economy to advance the long-term economic growth plans, attract more investors and strengthen the major drivers of the property market.’

building binge The Philippine capital is currently experiencing a building boom, thanks to strong economic fundamentals and record-high remittance from overseas Filipinos.

Manila’s emerging business districts ❶ UP–AyalaLand Techno Hub ❷ Eton Cyberpod Centris ❸ Eastwood City ❹ Araneta Cyberpark ❺ Greenhills Redevelopment ❻ Rockwell BPO Complex ❼ Edsa Central ❽ Robinsons Cyberpark ❾ Rockwell Center ❿ Century City ⓫ McKinley Hill ⓬ SM Mall of Asia Complex ⓭ Metropolitan Business Park ⓮ Newport City ⓯ Aseana IT Business Park ⓰ Asiaworld City ⓱ Madrigal Business Park ⓲ Filinvest Corporate City

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SPECIAL REPORT + THAILAND S EPTEMBER— OCTO BER 20 1 2

HIGH THAI For many overseas property buyers, Thailand conjures up thoughts of sun-kissed beaches, cheap property and good long-term capital growth. By Thomas Whale

44

www.propertylife.asia © SXC.HU / AOOD

easier for non-Thai buyers to purchase.

Buyers are also interested in purchasing villas, but the buying process for freehold properties is more convoluted and takes longer, since foreign nationals are not allowed to own residential land.

Thai Property Ombudsman Siracha Charoenpanij recently stated that he was looking to change the law to provide clearer guidelines for foreign ownership of land with more legal clarity, and is due to submit a draft proposal to Thailand’s parliament later this year, which may help.

The most popular Thai destinations for Rightmove-using UK-based buyers are the tourist resorts of Pattaya, Phuket and Koh Samui. With launch prices for some developments starting from $25,950, it is not hard to see why. We work with a number of agents and developers based not only in Thailand, but also in the UK, who use Rightmove to advertise their Thai properties through a variety of methods.

With some of the larger developers, it is all about raising their brand awareness and getting their name known in the UK.

SUN-kissed Thailand’s islands and beaches are a hotbed of chic yet affordable properties.

PHOTO courtesy of tourisms authority of thailand

T

he Thai property market has recovered well from the dual setbacks of political unrest in 2010 and natural disasters in 2011, positioning itself as one of the long-haul destinations of choice for overseas home hunters.

The well-documented financial troubles afflicting the Eurozone over the past 24 months could be argued to have also benefitted property sales in Thailand, where British buyers, unsure of where to invest outside the UK, have been eyeing up properties in South-East Asia in increasing numbers.

At Rightmove Overseas, we have seen a noticeable rise in interest regarding properties in Thailand. From June 2011 to June 2012, we saw searches rise 157% year-on-year, from 17,413 searches in June 2011 to 44,820 searches in June 2012.

This has resulted in Thailand becoming our 14th most popular country on the overseas section of our website, out of over 85 countries advertised online. And with the Thai baht settling down to between 48 and 50 to the pound over the past year or two, buyers seem to be comfortable investing in Thai property, knowing that the country’s economy is stable.

The vast majority of enquiries sent to our advertising agents are for newly built beachfront condos, as legally they are

Because of that, they utilise advertising products such as banners, editorial and direct email campaigns, where they promote their latest project direct into the inbox of interested buyers.

Agents, on the other hand, are less concerned about branding and more about direct unit reservations. They are aware that a lot of buyers enquiring on their properties from the UK are in the early stages of their buying journey – it is not going to be a quick sale so they are in for the long haul as do all advertisers selling properties in Asian destinations to the UK market. Sellers need to be aware that it is important to gain rapport with the prospective buyer in the early stages of their property buying journey, ascertaining their wants and needs when it comes to what they are looking for in a property, preferably over the telephone, rather than just sending an email and wondering why the prospective buyer hasn’t got back to them. It’s important to keep in regular contact with any overseas buyers you contacted, as when they do finally decide to buy, they tend to buy from the last person they spoke to.

There are still some buyers who buy units without travelling over to Thailand, but in this post-credit crunch world, buyers are being pickier. UK buyers tend to take a lot more time making a decision about buying overseas property in general. Because of that, we have noticed that some of our Thai advertisers are paying a lot more attention to how they display and advertise their properties for sale on our site. Out go artists impressions and limited descriptions, and in come professional CGI images of both internal and external views of the property, floor plans and detailed descriptions outlining the local area, investment information and as many facts as a user would want in order to make a balanced decision about enquiring. With the cheapest flight to Thailand from the UK being around US$865, buyers always like to arm themselves with all the appropriate information before taking the next steps, especially in a destination like Thailand situated on the other side of the world.

In terms of the seasonal trends, we tend to see more activity from Thai advertisers and Thai property hunters from September/October through the winter months in the UK up to April/ May time. The weather in the UK always plays a part in site traffic, and around the start of every year we see searches shoot up for long-haul and emigration destinations as ‘new year, new start’ mentality sweeps the buyers looking to leave Great Britain.

Overall, with the huge jump in searches for Thai property on Rightmove from 2011 to 2012, we predict that Thailand will still offer good value for money, attractive investment opportunities and a low cost of living for property buyers from the UK for a long time to come yet.

Thomas Whale is an account manager for Thailand at Rightmove Overseas.

Key house price facts Square metre prices

US$2,996

Rental yields

6.53%

Rents

US$1,957

Price/rent ratio

15 years

Price/GDP per cap

56.73 x

Roundtrip cost

0.07%

Rental income tax (effective)

3.80%

Capital gains tax (effective)

37.00%

House price change 1 year

12.16%

House price change 5 years

-13.88%

Cost of rent in Thailand (in USD) Japan

$6,750

Hong Kong

$6,328

Singapore

$4,817

India

$3,031

Philippines

$2,761

South Korea

$2,675

Thailand

$1,957

Indonesia

$1,955

China

$1,841

Cambodia

$1,553

Malaysia

$1,356

Taiwan

$1,117

Vietnam

$1,110

Income tax on rental income in Thailand Bangladesh

25.00%

Malaysia

22.42%

Georgia

20.00%

Taiwan

20.00%

Indonesia

20.00%

Vietnam

20.00%

Singapore

15.13%

Kazakhstan

15.00%

Azerbaijan

14.00%

Cambodia

14.00%

Hong Kong

12.16%

India

8.11%

Sri Lanka

6.62%

Philippines

5.13%

Pakistan

5.00%

China

Thailand South Korea Japan

House price change 10 years

24.20%

Landlord & tenant law

Pro Landlord

GDP per capita

US$5,281

GDP cap growth 1 year

5.79%

GDP/cap growth 5 years

60.24%

Economic freedom rating

64.73

Economic freedom rating 5 years

14.31%

Competitiveness rating

4.52

160 sq. m.

Property rights index

45

Currency +/– Value

US$0.54

Taxes on residents (Average Rate)

n.a.

5.00%

3.80% 2.48% 1.70%

Rental income in Thailand | Thai investment properties COST (US$) MONTHLY TO BUY RENT

YIELD (p.a.)

50 sq. m.

165,950

1,025

7.41%

80 sq. m.

252,000

1,441

120 sq. m.

359,520

1,957

470,720

BANGKOK Aparments

PRICE/SQ.M. (US$) MONTHLY TO BUY RENT

3,319

20.49

6.86%

3,150

18.01

6.53%

2,996

16.31

2,133

5.44%

2,942

13.33

225 sq. m.

558,225

2,826

6.07%

2,481

12.56

300 sq. m.

798,200

2,994

4.53%

2,644

9.98

375 sq. m.

1,052,250

3,480

3.97%

2,806

9.28

Districts researched: Bangkok: Sukhumvit Road, Silom, Sathorn, Riverside, Rama III, and Central Lumpini

Thai customs every visitor should know

by Franz A.D. Morales

public service for six decades and his humble demeanor. The King’s visage can be seen everywhere, from posters on building exteriors to wallet-sized photos on taxi dashboards. The King’s anthem is played before movies, sporting events, and concerts, and you would do well to stand whenever you hear it playing. Outsiders are also recommended to never make negative comments about the royals. Thailand has strict lese majeste laws and offenses are p ­ unishable by imprisonment.

Visitors will also notice the Thai’s national pride. For decades, the government has initiated various practices to promote nationalism. One example is the playing of the national anthem twice a day. Everyone is required to drop what they’re doing and stand at attention whenever the anthem is being played, even motorists and outsiders.

Thais also believe in auspicious colours.

FEstive mood A painted elephant marches along a crowd of onlookers in the city of Surin, celebrating the Elephant Festival and Roundup (left). A golden Buddha is paraded among throngs of believers during Asahara Bucha, the day before the Buddhist Lent Day.

Therefore, they wear a different colour for each day of the week. These beliefs are based on pre-Buddhist Hindu legends and are most noticeable on Mondays when yellow is the colour of choice by many people, which honours the day the King was born.

Other popular colours are pink (worn on Tuesdays) and light blue (worn on Fridays, the day the Queen was born).

When a local tells you, ‘Mai pen rai’, which means, ‘Never mind’, don’t think of it as a way for them to ­dismiss you. In fact, the phrase is the ­country’s ­unofficial philosophy which ­encapsulates the locals’ propensity to keep cool in stressful situations. It’s a lot like the Lion King’s Hakuna ­Matata. It means, ‘No worries.’ So ­instead of taxing ­yourself with trivial matters: Mai pen rai! Don’t take things too seriously, and anything that’s worth doing should be done with a smidgen of fun or sanuk!

Depending on what you read, Thailand is famous for many things. One of which is the country’s sexual t­olerance. As such, GLBT travellers are safe here and need not fear discrimination. In stark contrast to this sexual ­tolerance, Thailand is also a treasure trove of religious objects. Though teachings against material attachment

PHOTOS COURTESY OF TOURISM AUTHORITY OF THAILAND

W

hen in Rome, do as the Romans do. The same maxim applies in Thailand, or anywhere else in the world for that matter. When investing in property in a foreign land, especially if you plan on spending some time in it, it is wise to do as the locals do. It not only gives you the confidence of knowing at least a small part of the local culture, but it’s also a means of showing respect to the locals themselves.

One of the first things you should learn when visiting Thailand is their way of greeting. The wai, or the act of pressing the palms together, placed at nose or chest level as you bow your head slightly, is perhaps the first gesture to welcome you as you land in Thailand. It is an important aspect of Thai etiquette and it is a sign of respect (or reverence if used in front of the image of Buddha). It is a versatile greeting, one which can be used to express a hello, thank you, or goodbye.

When in Thailand, visitors should also be aware of its culture of absolute reverence. The country is a constitutional monarchy, and its royal family is revered fervently. The King in particular is beloved by everyone, most notably for his unfailing

Thai festivals

Here is a quick reference guide to some of the main celebrations in the country.

January

February

New Year’s Day Though the country’s traditional New Year is held in April (called the Songkran Festival), the year still changes every January 1st, and the Thai still follow the western calendar. In Bangkok, the New Year countdown is usually held at the World Trade Centre.

Valentine’s Day In a place where public displays of affection are rare, the young people are generally shy when it comes to love.

However, every Valentine's Day, the celebration gives everyone the opportunity to send cards or ask someone out on a date without feeling awkward. Spread the love.

Chinese New Year About 10% of Thai people are of Chinese descent, and the Chinese New Year, which falls on a date between January 21 and February 20, is always a big event. In Bangkok, be sure to dress in red and head on down to Chinatown!

Makha Bucha A religious public holiday, Makha Bucha celebrates the day when 1250 disciples amassed without prior notice to listen to Buddha preach a sermon of some of his most important teachings. Devotees usually spend the morning in a temple, join the ceremonies, and come nighttime, walk around the temple three times while holding candles.

June

July

4

7

1

May

1

14

Visakha Bucha This public holiday celebrates the birth, enlightenment and entry into Nirvana of Buddha.

March

April

7

Mid-year holiday A bank mid-year holiday.

Chakri Day A public holiday commemorating the founding of the Chakri Dynasty. The present king, Rama IX, is the ninth king of this dynasty.

13–15 Songran Festival The traditional New Year of the Thai people, it is perhaps the most important holiday of the year. Statues of Buddha are sprayed with water as a sign of purification. Be prepared to get wet too, as the locals also splash each other!

2

Labor Day

5

Coronation Day Commemorates the crowning of King Bhumibol Adulyadej on May 5, 1950.

▶ Thai traditional dance Symbolic of the Thai people themselves, it is a graceful dance where gorgeously dressed men and women mimic ancient stories.

It was developed and performed originally for the royal court.

October

November

23

Chulalongkorn Day This public holiday commemorates the day when King Chulalongkorn (Rama V) died in 1910. Under his rule, Siam became a semi-modern country. He is revered as a semi-god and many people bring offerings in front of the king’s statues.

27–28

30

Loy Krathong This celebration happens on the first full moon day of the month of November.

The Thai people buy or make krathongs, which are small boats made of banana leaves adorned with flowers and a candle, and are set adrift at night in rivers and ponds. These are offerings to the spirit of the water to help them wash away sins.

Awk Phansa The end of the Buddhist Lent, monks are now allowed to wander outside their temples. People bring them offering of robes and food, a ceremony called Thot Kathin, and lasts a month.

6

August

PHOTOS COURTESY OF TOURISM AUTHORITY OF THAILAND

is part of Buddhism, many locals worship ­Buddha images and wear amulets for ­protection. You might see religious objects everywhere, from the streets to various establishments. If you e­ncounter such displays, make sure to not touch them for the Thai ­people are a highly s­uperstitious lot and might mistake your touching religious ­objects as a disruption of the harmonious ­balance.

There are many stories of seemingly normal behaviour being offensive in other countries, and this holds true in Thailand where one must observe proper bodily conduct at all times. According to Buddhist beliefs, the head is the most important part of body while the feet are the lowest.

Touching someone on the head is deemed highly offensive, while raising your feet or using them to point at people or objects is a no-no. When entering homes and religious structures, shoes are always removed.

Though most types of attire are tolerated, when visiting a temple or shrine, it is best to cover up. Sleeveless shirts, tank tops, short skirts, shorts, and flip flops can bar you from entering. Also, there are some sacred places where women are not allowed to enter. It’s also taboo for women to touch a monk or passing things directly to him, though to have a polite conversation is allowed.

When addressing each other, Thais normally use their first names with the honorific title Khun to show ­respect. This is applicable to both men and women. In a relaxed setting, ­mono-syllabic nicknames are used. usually The more traditional nicknames ­ use names of fruit, colours or animals like Daeng (meaning red), Lek (meaning small), or Moo (meaning pig). You might encounter modern nicknames like Good, Money, and even Benz (as in the car).

Finally, when visiting Thailand, one must know proper toilet etiquette. It’s one of the basic human functions, and to act appropriately is a must. When outside large cities, be prepared to use squat toilets. These are flushed using buckets of water that are usually beside the hole. Toilet paper must be discarded in trash bins and never try to flush it down since local plumbing usually cannot handle paper.

Thailand is a nice place to stay, and a great place to live. Just do as the Thais do and you will fit in just fine.

Asahara Bucha The day before the Buddhist Lent day, this public holiday celebrates the day when Buddha delivered his first sermon to the first five disciples.

Khao Phansa Start of the Buddhist Lent, it lasts three months and monks are not allowed to sleep outside their temples.

People are also not allowed to drink alcohol.

3

12

Queen’s Birthday The birthday of Queen Sirikit, born 1932, is also celebrated as Mother’s Day.

December

5

King’s Birthday The birthday of Bhumibol Adulyadej the Great, the beloved King and father of all Thai people. As with the Queen’s birthday, this day is also celebrated as Father’s Day. Constitution Day This public holiday commemorates the first constitution of Thailand, which was passed in 1932. It marks the country’s shift from an absolute to a constitutional monarchy.

10

25

Christmas Day Though a Christian tradition and not officially part of Thai tradition, it is still celebrated as the Thai people love to give gifts to each other.

More a commercial and marketing event than a traditional event, Christmas trees are usually found inside shopping malls rather than at people’s home.

Education in Thailand by rodel Ambas Jr.

T

hAilANd’S educational system has come a long way since the time of semi-public Buddhist monasteries offering education only to male students. Thanks to the efforts of King Chulalongkorn (Rama V), who assumed the throne in 1868 and introduced reforms to the country’s educational system, Thailand now has a robust educational system that is on par with other countries.

INTERNATIONAL SCHOOLS The International Schools Association of Thailand (ISAT) is the country’s foremost group of international schools. It acts as a link between ISAT member-schools and the government’s Ministry of Education, particularly the Office of the Private Education Commission. Currently it has 95 member-schools that offer a range of curricula, from American and British systems to Montessori education.

Thailand’s international schools have many advantages when it comes to international education facilities. The standard of education of ISAT member schools are recognised by international accreditation organisations, such as CfBT Education Trust (formally WES), the Western Association of Schools and Colleges, the New England Association of Schools and Colleges and the Council of International Schools. For a complete list of ISAT member-schools, visit www.isat.or.th.

HIGHER LEARNING Ranked 171 in the world in the 2011 QS World University Rankings, Chulalongkorn University today consists of 18 faculties, three schools, three colleges and six institutes, and has presented honorary degrees to international dignitaries and heads of state, including Lyndon Johnson, Bill Clinton, Rajiv Gandhi and Nelson Mandela.

Another notable player is Mahidol University, officially Thailand’s second best (number 229) according to the 2011 QS World University Rankings.

This multi-disciplinary university offers undergraduate and graduate programmes in numerous fields, such as medicine, public health, engineering, veterinary sciences, music and the arts.

The university’s international college (MUIC) also offers most of the university’s 20 international undergraduate programmes. With over 20 years of experience, the college is one of Thailand’s most successful international undergraduate degree programmes.

Over the decades since its founding, Thailand’s second oldest institution of higher learning – Thammasat University – has evolved from being an open university for law and politics to a prestigious international university offering all levels of academic degrees across many disciplines. Its alumni include prime ministers, government officials, leading corporate figures and members of the royal family.

Led by the Brothers of Saint Gabriel, Assumption University is Thailand’s foremost private Catholic university and is noted for attracting large numbers of foreign students. Assumption University is also the first international university in Thailand.

Chiang Mai University meanwhile is northern Thailand’s foremost institution for higher education. Starting in 1964 with only three faculties (science, social sciences and humanities), the university now has 17 faculties that offer 253 programmes to more than 25,000 students. In addition, two international bachelor’s programmes and 18 international master’s and doctoral programmes, all taught in English, are presently being offered to prospective foreign students.

How to apply for a student visa in Thailand 1 Upon deciding which course or degree programme you want to sign up for, send in the completed application form to the school of your choice, along with other requested paperwork, and wait to get accepted.

2 If accepted, you should receive a Letter of Admission (printed on the school’s letterhead) within a few weeks.

3Take your Letter of Admission, a photocopy of your passport, your passport, four passport-sized photographs, and a completed visa-application form to your nearest Thai embassy or consulate.

Once granted, the Education Visa is valid for only 90 days, so you have to extend it once you get to Thailand.

4 Your Education Visa will be activated as soon as you arrive in the country, so your first 90 days will begin from there.

5 Once in Thailand, register at your intended school and pay all the required fees. The school will then give you a Registration Letter and a receipt, which you will need to get your visa extended to 1 year at any Thai Immigration office.

House hunting in Thailand

by Franz A.d. morales

river ToWN Raimon Land's The River project offers a view of the Chao Phraya and Bangkok's skyline PHOTO COUrTeSy Of rAimOn lAnD

I

t is more than just picking the best looking house at the right budget, more than location alone, and more than what your needs require. It’s all about getting the perfect mix of the above combined with what works.

There are a cornucopia of homes that can be perfect for you and your family if you know how to look. Ask yourself: is it the right location? Does it look good enough? Does it address all my needs? To find the perfect combination of the three, the best course of action is to weigh your options carefully. We can only go so far as to recommend idyllic spots to buy property in Thailand – based on its reputation and its popularity among home buyers – but it’s up to you to figure out which piece of property is perfect for you.

Karon, the second largest of Phuket’s tourist beaches and site of numerous restaurants and tourist stores. With its gorgeous coast and colourful history, it’s no wonder Phuket tops the list for the best places to invest in property.

PHUKET

BANGKOK

Thailand’s largest island, Phuket is approximately the size of Singapore. Formerly known as Thalang, Phuket is one of the southern provinces of Thailand. Steeped in history, the island was part of the major trading routes between India and China.

Today, it derives most of its income through tourism. Beaches here are world-class, with the largest being Hat Patong known for its surfing and watersport activities, and Hat

The capital city and largest urban area of the country, Bangkok is the economic centre of Thailand. With numerous cultural landmarks and attractions, its rapid modernization and strategic location, the city is the obvious choice for property investors who want to settle in one of the busiest cities in Asia. It is perfect for the travelling businessman or for urbanites who can’t live without the hustle and bustle of city life.

KOH SAMUI An island off the east coast of Kra Isthmus in Surat Thani Province, Koh Samui (or Samui, as the locals call it) is the second largest island after Phuket. With a population of about 50,000 and attracting 1.5 million visitors a year, it is one of the more popular destinations in the country.

Rich with natural resources, white sandy beaches, coral reefs, and dotted with coconut trees, Koh Samui is one of the hottest property markets in Thailand

PATTAYA A city and beach resort, Pattaya is located on the east coast of the Gulf of Thailand.

A self-governing municipal area, it has a population of 100,000 and is extremely popular among tourists and expatriates.

Many foreigners invest in property here, and Pattaya is always a safe bet for those considering buying a home.

CHIANG MAI Also known as Chiengmai, the city of Chiang Mai is the capital of Chiang Mai province. It is the largest and most culturally significant city in northern Thailand.

Located around 700 km north of Bangkok, the city is situated among the highest mountains in the country. The city is also

PreSTiGe ProJecTS (Clockwise from upper left) 185 Rajadamri, The Legend Saladaeng, a duplex unit at The River, and an interior shot of 185 Rajadamri.

PHOTOS COUrTeSy Of rAimOn lAnD

the only tourist destination in Thailand to have made the list of 2012’s ‘25 best Destinations in the World’, ranked 24th, according to TripAdvisor. For individuals who love culture and wish to live in the heart of Thailand’s ‘Creative City’, then Chiang Mai is definitely the place to be.

KRABI Moving down south, on the west coast of Thailand, Krabi is a town that is situated at the mouth of the Krabi River. Those

who love to live at one with nature would do well to choose Krabi as the site of their second home. The province where Krabi is located is home to several national parks and boasts of over 80 small islands like Lanta islands and Phi Phi islands.

These places have been made famous as the ideal location for adventurers, yachtsmen, scuba divers, and snorkelers, and generally anyone who has adventure in their veins.

Thailand is rife with home investment opportunities. All you need to do is keep an eye out for the perfect home for you.

Be it a seaside resort home or an urban dwelling, Thailand is a land of opportunity and many exotic thrills will keep you wanting for more.

Health care in Thailand

by Rodel Ambas Jr.

B

efore relocating to Thailand, there are a number of concerns that expatriates should be aware of, and one of these is the issue of health care.

Although the country’s healthcare system has improved significantly over the past 20 years, as indicated by its increasing annual spending on health care (about 5% of its GDP, according to the World Health Organisation), more needs to be

done. Thais also do not do particularly well compared to other nationalities, such as Singaporeans and Malaysians.

According to medical insurer Allianz, Thailand’s health care is handicapped by a shortage of general practitioners. Most Thai doctors are specialists, which can be a problem because they tend to diagnose and treat within the parameters of their speciality. Hence, when an expatriate goes to a general hospital, he or she will most

likely be examined by a doctor who is a specialist in one field or another.

The best way, especially if one is sure of his or her medical problems, is therefore to simply seek an internist as the first port of call.

Emergencies Traffic congestion may impinge on ambulance response times and transporting patients to hospital. Ambulances are not accorded the same deference from motorists as in the West. Emergency facilities need further development.

Allianz recommends that visitors who think they may need medical attention should base themselves near a hospital of appropriate standard. Expatriates should also keep cash handy. ‘Have your medical insurance documents with you – either that or another form of payment,’ says Allianz.

H

Hospital provision

Better-off patients are likely to use one of 450 private hospitals. In Bangkok, there are several hospitals with high reputations where most expats go. Some of Bangkok’s top-notch hospitals include: ❶ Bangkok Hospital (and its affiliate hospitals, such as Bangkok Heart Hospital, Bangkok Cancer Hospital and Bangkok Hospital Hua Hin) www.bangkokhospital.com ❷ BNH Hospital www.bnhhospital.com ❸ Bumrungrad Hospital www.bnhhospital.com ❹ Samitivej Hospital www.samitivej.co.th Observers say that these hospitals have developed a reputation for top-end treatment, with a pricing structure to match.

The concentration of foreign patients in these hospitals is also very high. Generally, private hospitals have four times the number of beds per patient than the state sector, and much shorter waiting times.

Price of health

© SXC.HU / ZEATHIEL

Cost, on average, of common procedures in two of Bangkok’s most well-known hospitals. Note that these are subject to change and should be used as general guide only.

(www.bangkokhospital.com)

Vaccination The US Centers for Disease Control and Prevention recommends getting vaccinated for the following diseases before visiting Thailand.

Routine Recommended if you are not ­up to date with routine shots, such as measles/mumps/rubella (MMR) ­vaccine, diphtheria/pertussis/tetanus (DPT) vaccine, poliovirus vaccine, etc.

Hepatitis A or immune globulin (IG) Recommended for all unvaccinated p ­ eople travelling to or working in countries with a high level of hepatitis A virus infection, where exposure might occur through food or water.

Hepatitis B Recommended for all unvaccinated persons travelling to or working in countries with high level of endemic hepatitis B virus, especially those who might be exposed to blood or body fluids, have sexual contact with the local population, or be exposed through medical treatment.

Typhoid Recommended for all unvaccinated people travelling to or working in South-East Asia, especially

Bangkok General Hospital

if visiting smaller cities, villages or rural areas where exposure might occur through food or water.

Japanese encephalitis Recommended if you plan to visit rural farming areas and, under special circumstances, an area where a known outbreak of Japanese encephalitis has occurred.

US$4,728.87

Abdominoplasty package

US$2,837.32

Liposuction package

US$3,152.58

Rhinoplasty reduction

US$3,783.10 Face lift

(face and neck)

Rabies Recommended for certain travellers with high occupational risks, such as veterinarians, wildlife professionals and researchers, and long-term travellers and expatriates living in areas with a high risk of exposure.

US$3,783.10

Malaria If visiting an area in Thailand where malaria is known to occur, you will need to discuss with your doctor the best ways for you to avoid getting sick. Ways to prevent malaria include taking a prescription anti-malarial drug, using insect repellent, wearing long pants and long-sleeved tops to prevent insect bites, and sleeping in airconditioned or well-screened rooms and using bed-nets

US$914.25

Breast augmentation (saline implant)

Bangkok Heart Hospital (www.bangkokhospital.com/ hearthospital/index.php)

Coronary angiography

US$3,940.73

Percutaneous transluminal coronary angioplasty

US$18,600.25

Coronary artery bypass graft

US$18,600.25 Note: Your doctor or healthcare provider will determine what you will need, depending on factors such as your health and immunization history, areas of the country you will be visiting and planned activities.

Source: Health Information for Travelers to Thailand (wwwnc.cdc.gov/travel/destinations/thailand.htm#vaccines)

Mitral or aortic valve replacement

The Developer Test Buying property in Thailand is safe if you find the right developer. By Rene Philippe Dubout

F

rom experience, we know that most problems occur when buyers purchase property off plan1.

Whether or not the transaction has a favourable outcome will depend solely upon one single factor: Did the buyer purchase from a reliable developer or not?

Truth be told, purchasing off plan is no more dangerous when purchasing offshore than in your home country, as long as you are purchasing from a reliable developer who operates in the country where you are purchasing.

Briefly, developers in any ­country may be separated into two main ­categories. On the one hand, you have what I call Top Developers. These are mostly public companies listed on the stock exchange, such as in Thailand Raimon Land, Natural Park, Sansiri, to name only a few. These companies have substantial capital, access to financing and a track record of success.

Purchasing off plan from one of these developers is nearly risk-free, because these developers are concerned about their reputations.

On the other hand, you have small- or medium-sized developers. Here again, these are mainly reliable and professional, but unfortunately there are also many unprofessional ones.

Who are the unprofessional developers? They are mostly investors who may or may not have previously worked in the real estate sector, who woke up one day having finally found their ‘true’ calling.

They become land developers over night.

Not all First-Time Developers are bad, and it is possible through dedication and hard work to be new in a business sector and also be successful. However, the common denominator of all start-up businesses, including First-Time Developers,

is that they are doing business against the odds.

Generally speaking, First-Time Developers have no previous record of success in real estate development. They are often foreign investors newly arrived in Thailand and, as such, they are rarely able to speak, much less read, the local language, and will have only a superficial understanding of the laws applicable to land ­development.

The average cycle of project developments by First-Time Developers will take place as follows: In most cases, the First-Time Developer has enough ­capital to purchase project land2 and to hire an architect to do some drawings and a master plan. In some cases, they will have enough capital to start the construction of a show house and lay the ground work for the utilities, but rarely more. Their FirstTime Developer status will make it hard or impossible for them to access commercial loans for financing their projects.

De facto, the First-Time Developer has no other options. Once the original capital has been spent, continued financing for the construction and development of the project will come out of their clients’ pockets. First-Time Developers will easily sell the first five to ten units of their projects (10% to 20% of the whole project) to family members and close friends as they commence the construction in earnest.

1 Off-plan property is a property that is at the planning stage and is yet to be built or has not yet been fully constructed when it is bought.

2 In some cases, however, they are First-Time Developers who start a project without even owning the land on which the project is developed. Generally, they’ll have paid a deposit and agreed on payments by installment with the landowner.

However, the level of sales will soon drop and/or the ­developer will begin to encounter problems dividing the land, and/or will have used part of the payments made by the customers to build their houses and market the project.

Whatever the cause, the time will come when the First-Time Developer begins to encounter financial difficulties as cash flow is less than ­anticipated, or the project construction will begin to suffer more and more delays as a r­ esult of unwise spending. After a time, those few existing customers will stop making payments and this is when the project fails.

First-Time Developers are not generally dishonest and they seldom start their projects with the intent of cheating or harming their customers. They firmly believe in what they are doing and, while they do not have the capital to fully finance their projects, they ­generally invest all of their savings in the projects and will end up broke if they fail. First-Time Developers hold little prospect of success and their ­projects are likely to fail as the elements of insufficient experience, knowledge and capital combine for the only outcome possible: failure.

It is possible to safely purchase real estate in Thailand. Just be sure to choose your developer wisely!

The Rene Philippe Developer Test C RI T ERI A

POINTS

DEVELOPERS

1

2

3

4

© SXC.HU / AMEENULLAH

1. Type of the company

Is the developer a public or a private company? If the developer is a public company, is it listed on a stock exchange? To incorporate a public company is more difficult than establishing a private company. A listed public company indicates better financial resources as well as better transparency when compared with a non-listed company.

a. Is a Public Company quoted on the SET b. Is a Public Company not quoted on the SET c. Is a Private Company d. Is an Individual

15 10 5 0

15 10 5

5

2. Capitalisation

How to test a developer’s reliability?

Buying a home abroad, whether as the realisation of a dream or as an investment, does require a bit of savvy and common sense. This will be especially the case if you are purchasing a property which has yet to be built.

The developer test I created a points-based system I call the ‘Developer Test’, a unique and easy way to discern the reliability of a developer before purchasing any property.

While this test was developed initially for the Thai Real Estate Market, it may be used to check the reliability of a developer in any given country. Indeed the five criteria used to evaluate the reliability of a developer can be found in every country.

The paid-up capital is a major gauge of the financial status of development companies. It is an important criterion because many first-time developers lack the capital to build their projects and tend to rely on their clients’ payments to fund ongoing construction. Buyers should examine a company’s capital strength along with the schedule of payments for the property (see 5 below).

a. Has a Capital of 1 billion THB or more b. Has a Capital of 100 million THB or more c. Has a Capital of less than 50 million THB d. Has a Capital of less than 10 million THB

15 10 5 0

15 10 5 0

3. Longevity

For how long has the developer company been incorporated? Note that buyers should always examine this criterion along the experience (see 4 below). Indeed a company that has been incorporated 20 years ago but has been idle for 20 years is not better than a newly incorporate company.

a. Has been registered for 10 years or more b. Has been registered for 5 years or more c. Has been registered for 3 years or more d. Has been registered less than 2 years ago

15 10 5 0

15 5

5 0

4. Experience

Related to longevity, buyers should also examine the developer’s previous projects. The number of projects completed indicates the experience of the developer in the business.

a. Has completed more than 10 projects b. Has completed more than 3 projects c. Has completed 1 project only d. Has never completed a project in Thailand

15 10 5 0

15 10 5 0

5. Schedule of payments Rene Philippe Dubout is a Swiss attorney with a background in international business, transactional law and arbitration. He has been recognised as ‘the real estate veteran’ and ‘real estate finance expert and author’. A former lecturer on international private law at the Asia Institute of Technology master degree programme, Rene is an accomplished speaker and has published many articles in local magazines. You can ask him your questions at contact@renephilippe.com

If a developer asks for buyers to pay up to 80–90% of the purchase price during the period of construction, it is likely the project relies on customer money for completion, making it riskier. Reliable developers only use a table of payments indicating several instalments totalling a maximum of 30–40% of the purchase price during the period of construction. The balance of the payment, which is 60–70% of the price, is paid upon the completion and handover of the property to buyers.

a. Conditions of Payments are 30% or 40% prior and 60% to 70% upon completion and transfer of the property at the land department

15

b. Conditions of Payments are 80% prior and 20% upon completion and transfer of the property at the land department

5

TOTAL

15

15

15 5

75

45

40

10

As stated above, while this test was developed for the Thai real estate market, it is applicable in any other country in which you may be interested to purchase real estate or a home abroad.

Why invest M in Melbourne It may be second only to Sydney in terms of economic importance, but its liveability is unparalleled.

PHOTOS BY TIMOBALK

©SXC.HU

elbourne has once again been voted the world’s most liveable city in 2012. It is the second year running Melbourne has received this honour, based on a survey conducted by the Economist Intelligence Unit.

Melbourne boasts a multitude of cultural attractions and is a cosmopolitan city.

Enjoy some of Australia’s best gastronomy, sporting events (think the Melbourne Grand Prix), shopping and performing arts productions any time of the year. And this multicultural city welcomes residents from more than 235 countries and regions.

It’s no surprise then that Melbourne’s population is growing at a rapid rate. Currently the population sits at 4.1 million (Australia’s second largest) and is expected to increase to 5.2 million people over the next 20 years. This rapid increase in population will without doubt put pressure on the supply of residential accommodation, which bodes well for strong capital appreciation, strong rental demand and rising rental yields.

suN risiNg The central business district of Melbourne, the world’s most liveable city according to the Economist Intelligence Unit.

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The state of Victoria, of which Melbourne is the capital city, is economically robust. And although the state takes up only about 3% of Australia’s total landmass, it produces about a quarter of the country’s total GDP. Although the residential rental vacancy rate for Melbourne improved somewhat in the past year, mainly due to an increase in supply of new homes, it is still hovering around the 2% mark, reflecting a rental market that is still imbalanced. Generally a vacancy rate of 3% indicates a balanced rental market and anything under this reflects a supply issue, where supply cannot meet demand.

Melbourne remains the most soughtafter property market over all other Australian cities from Singaporean investors. It is one of the most stable property markets in Australia in terms of steady, consistent, upward property price movement and offers strong capital growth and rental returns.

Of course another reason that Singaporean investors purchase Melbourne

property is because it is a city with which they are familiar, perhaps having lived or studied in Melbourne themselves. But also of course, Melbourne boasts some of Australia’s, and indeed the world’s, leading universities. Many Singaporeans have children studying in Melbourne such as in Melbourne University, RMIT, Monash University or Swinbourne University, and it makes perfect sense to purchase a property for children to stay during their study years rather than pay rent (and pay off someone else’s mortgage).

Of course the key questions are where to buy and what type of property. Melbourne is one of the largest cities in Australia geographically so it pays to understand where

exactly are the most sought-after suburbs and locations that will ultimately produce the best capital growth and rental returns, bearing in mind that generally, Singaporean residents are restricted to only buying either brand-new or off-the-plan property. And the exit strategy is also another major consideration. Note, when you sell, you can only sell back to the local market, so although a particular type of property may appeal to you, it may not be in the least appealing to a local Australian tenant or future owner-occupier. It’s imperative that you thus take emotion out of the equation and focus solely on key investment fundamentals.

Top Melbourne locations

much sought after Melbourne skyline viewed across the Yarra River (left) and the city’s harbour.

Traditionally those inner-Melbourne suburbs that are to the south, east and southeast of Melbourne CBD perform best, particularly those that are within the ‘golden circle’ (that is, a 5-kilometre radius of the CBD).

One major difference that Singapore residents should note is that, unlike in

Singapore, the CBD in Melbourne is not always the best location for investment.

Looking at property price growth over the past 10–20 years, it is those suburbs that are on the ‘fringe’ of the CBD, such as Southbank, South Melbourne, South Yarra, Prahran, Richmond, East Melbourne to name a few, that have performed much better compared with CBD property.

There has been up to 5% higher capital growth in these fringe locations compared with capital growth in the CBD over the past 10 years. So it pays to really research specific locations and not buy property simply because it is similar in location to what you would buy in your home country.

This can be one of the biggest mistakes an investor can make.

The state of Victoria allows for a substantial decrease in stamp duty costs for off the plan property purchases. Melbourne is the only major city in Australia

prime space Melbourne’s property market experiences a boom, thanks to strong capital growth and tenant demand.

Key property investment benefits for Melbourne ❶ Booming population growth ❷ Consistently strong capital

growth over the past 20 years

that has this key benefit continuously.

Only a small portion of the stamp duty is payable on the value of the land component and any improvements, upon completion and settlement of the property.

Having minimal stamp duty fees means that your investment dollars are going directly into your property and not into the government coffers. It’s all about maximising your investment monies and Melbourne is the only city in Australia that allows that – another key reason to invest in its property market.

❸ Strong capital growth predicted ❹ Strong tenant demand ❺ Low rental vacancy rates ❻ Robust economy ❼ World class universities

(Melbourne University, RMIT, Monash University)

❽ Huge stamp duty relief

for buying off plan

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A taste of Melbourne in Singapore

O

n the 7th of August at the Four Seasons Hotel Singapore, MillionaireAsia and All Property Solutions Singapore joined forces to showcase what’s widely regarded as the best apartment development in Melbourne, The Haven Apartments. With Singaporeans’ appetite for Australia’s property and mouth-watering apartments on offer, the turnout for the event was standing room only. Gabriel Koh, General Manager of All Property Solutions Singapore, said that ‘clients were buying property from US$550,975 (A$535,000) right up to US$2.68 million (A$2.6 million).’

MillionareAsia and All Property Solutions Singapore have a natural synergy: ‘We both only deal in quality and provide the highest level of service for our HNW clients,’ Gabriel says. Kery from MillionaireAsia also adds: ‘Our clients are sophisticated and often want to receive special deals or private exclusive benefits and we achieved that with the Haven Apartments. Being able to offer the property before the local Australian market launch was a real win. Our clients cherry picked the best apartments.’

hot property Great turnout at the Singapore launch of Melbourne’s The Haven project.

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27/08/12 9:28

Woman on top Kwanrudee Maneewongwatthana, Raimon Land Plc’s Deputy Vice-President for Marketing, shares her company’s plan for the future and how they plan to save the environment.

It’s quite an exciting time for Thailand’s property market at the moment.

How does Raimon Land plan to take advantage of the country’s upbeat economic climate?

Within the last three years, Raimon Land has moved forward to become more than a luxury property developer. Our strategy has been to diversify our portfolio from the ultra-luxury niche to include mid and high-end segments through the development of new brands. This new approach has resulted in a much stronger Thai customer base and a more reliable platform for future growth.

photo courtesy of raimon land

We see strong demand for condominiums from first homebuyers. The market in resort destinations like Pattaya is also doing well due to customers seeking a second home for weekends or holidays.

Meanwhile, we continue to deliver the quality products which have made Raimon Land’s reputation. Our experience in the luxury market has proved very valuable to understand client’s expectations.

Carlton and Raffles). Does Raimon Land see itself doing the same?

Other developers in the region are venturing overseas. Does Raimon Land plan to do the same?

What exciting future projects does Raimon Land have in the pipeline that investors should watch out for?

This is a possibility for the future, as we have a team with extensive international experience and strong capabilities for exploring and assessing foreign markets.

But for the time being, we are concentrating on our projects in Thailand.

Raimon Land currently has five projects in the pipeline, representing a total sales value of THB35.2 billion ($1.1 billion).

Units are now available for sale in each of them, with show suites ready to welcome interested buyers.

A number of property developers in Malaysia, Singapore and the Philippines are venturing into the mid-end of the market to tap into the growing number of middle-class. Does Raimon Land see itself as doing the same in Thailand?

In BanGkok, we have two eXcItInG Projects:

This is precisely what we have done within the last three years with our diversification strategy. In addition to the ultra-luxury niche, we have added high-end and mid segments in our offer, through the development of new brands like Zire, Unixx and Lofts. As mentioned earlier, this new approach resulted in a larger customer base and a more reliable platform for future growth. At the same time, we make sure that we keep in the DNA of each new brand that special ‘Raimon Land touch’.

Another trend we see in South-East Asia is to partner with well-known foreign brands (such as Trump, Ritz-

Our experience shows that Thai customers place much emphasis on the inherent qualities of a brand and are not as influenced by foreign names as in other markets. However, this kind of partnership might be appropriate for properties with a large number of foreign customers. Our approach on this will be pragmatic.

The River, which offers a breathtaking view of the legendary Chao Phraya and Bangkok’s skyline. The project is now completed and transfers to homeowners started at the end of June. Since its launch, The River has been a flagship project in Bangkok’s residential scene, with a riverfront location that is hard to beat.

The remaining 20% of total units are still available for sale, but not for long, I think.

185 Rajadamri is our most exclusive project to date, along historic Rajadamri Road. This is the last high-end freehold project in this area, with a fantastic view on the Bangkok Sports Club and Lumpini Park. This property boasts it all: prestige, character, convenience and soul. Sixty per cent of the project’s saleable area has already been sold.

photo courtesy of raimon land

TOP OF THE line Raimon Land’s Zire Wongamat is one of the company’s flagship projects in Pattaya’s luxury vavvresidential scene.

In Pattaya, we have three projects which can appeal to all kinds of customers: Unixx South Pattaya is our latest project in this resort destination. Since its launch at the end of 2011, it has received a warm response from customers looking for a quality product within a reasonable budget. With the Unixx brand, we are targeting a younger generation of homeowners looking for a combination of affordability, quality, style and convenience. Our research shows that customers do not necessarily want big spaces; they simply want a hassle-free, convenient place to relax during weekends and holidays.

We believe that future customers will ask for quality and eco-friendly products, a segment in which Raimon Land has lots of experience. offers a mix of luxury units, duplexes and penthouses as well as excellent facilities such as a fitness centre with state of the art equipment, swimming pools, sky gardens and tiered sun decks. We still have a few units for sale. We are proud that Northpoint has become a reference in the booming residential market in Pattaya.

Zire Wongamat, located along North Pattaya’s most prestigious cove, is a superior choice for young families who are looking for a more quiet second home right on the beach. It comprises two towers, the 37-storey North Tower, and the 54-storey South Tower. The North Tower was sold out within one year after the project launch.

What do you think will be the trend in South-East Asia’s property market 5 or 10 years from now?

Northpoint, recognised as the ‘Best Condo Development in the Eastern Seaboard’, is our most luxurious project in Pattaya. It

This is a difficult question to answer as the market changes rapidly. However, our research lets us anticipate an increasing cross-regional demand from middle

classes. We believe that future customers will ask for quality and eco-friendly products, a segment in which Raimon Land has lots of experience. Our properties have been pioneers in the development of green technologies, with efficient air conditioning systems, green landscape areas and so on.

Speaking of eco-friendly development, Raimon Land has a number of environmental sustainability programmes.

Is this part of the company’s overall strategy to position itself as the region’s leader in terms of environmental sustainability?

Our company has always paid attention to environmental preservation, in line with our corporate motto: ‘Raimon Land…developing a better environment’.

Throughout the years, we have developed partnerships with NGOs such as the Plant-A-Tree-Today Foundation (PATT), which has established a tree nursery in the Khao Yai National Park and helps educate children on environmental issues.

The company is also quite active in promoting Thai arts and culture.

As a good corporate citizen, we simply believe that promoting the Thai culture can bring unity and harmony to the country which is our company’s homeland.

Tell us more about Pang Raimon.

Pang Raimon is a 4-year-old female elephant who has been adopted by Raimon Land since its birth in 2008. Pang Raimon lives happily in a natural habitat at the Anantara Elephant Camp in Chiang Rai province. Through this long-term sponsorship, we want to show our commitment to supporting one of Thailand’s national symbols.

MASTER PLANNER Heller Manus Architects founder Jeffrey Heller.

Saving the world through

architecture If the world has more Jeffrey Hellers, the future may not turn out to be a monochromatic rubble after all. By Lucci Coral Photos courtesy of Heller Manus Architects

A

fter more than 40 years of architectural practice and passion for sustainability, Jeffrey Heller, FAIA, has become more than just a remarkable architect. He’s a major influence in drafting the blueprint for coherent green developments that serve as a sustainable environment for intensifying economic growth.

‘I very much wanted to participate in this era of growth and help make a positive difference in the world,’ says Heller.

With utmost respect in nature’s course, Heller has made models of sustainable/liveable master plans and infrastructures in China and San Francisco.

Heller founded Heller Manus ­Architects in San Francisco in 1984. Since then, he has led his firm into creating some of the most remarkable sustainable architectural projects and large-scale urban planning, ­ including the first LEED Gold office towers in San Francisco and Shanghai; the first LEED Platinum neighbourhood d ­evelopment master plan; and sustainable/liveable master plans for Guangzhou’s North and South Axes, ­Shanghai’s Yangpu Waterfront, and Ulanhot in Inner Mongolia.

FEATURE S EP T EM B ER — O C T OBE R 2 0 1 2

‘Our core philosophy is a combination of the following elements: contextual and people-friendly design (buildings that are appropriate to their setting); contemporary design to ­express the spirit of our time; and ­sustainable design which is to be achieved through visual, physical and technical design – a true green project,’ says ­Heller.

By expertly practicing this philosophy, Heller is often invited to speak in different conventions in different parts of the world, including the US–China Green Energy Council Mayor Summit & Smart City Development Forum 2011. He has also been awarded with myriad of recognitions, including the 2011 Guangdong Lingnan Characteristic Planning Award, Bronze Award for Guangzhou South Axis and 2003 PCBC Best Apartment Project for the Emeryville Amtrak Station in ­California.

Armed with his infallible creativity and a gigantic passion for creating sustainable designs, Heller was able to work together with leaders and decision-makers in realising the vision for a better world.

‘The move towards sustainability is

CITY OF TOMORROW Sustainable master plans for Guangzhou’s North and South Axes.

not done correctly, it is my belief that it will take ten times the effort to undo a bad decision,’ he shares.

MAKING A MARK IN CHINA sometimes viewed in a too technical way.

Not enough attention is paid to balancing quality-of-life issues and technical sustainability issues. The three fundamental elements of sustainable design are technical sustainability, mobility and liveability.

It is very important to balance those three elements in order to achieve a good future for the hundreds of millions of people living in cities,’ shares Heller.

He started his practice in San Francisco and as he gained the respect of decision-makers in China, he went back to international work and played a role in developing the country – making it adapt better to the natural perils brought by swift advancement.

‘In Asia in general, it is a race against time to create the correct physical setting for the rapid growth that is occurring almost everywhere. If the problems of urban design and i­ nfrastructure are not solved in a timely matter, or if the work is

The cosmopolitan charm of Shanghai opened Heller’s drive to pursue his v­ ision in the most progressive country in Asia.

‘Shanghai and later Guangzhou were for me inspirations because my experience in both cities has been that of a balance of dynamic growth and commitment to good urban planning practice. The government, the academics and the planners all strive to the same goal,’ he says.

As China’s economy and energy requirement exponentially grows, leaders and decision-makers got Heller on board to aid them in dealing with the dangers brought by rapid urbanisation.

‘Over the last decade China has increasingly become aware of the g­ rowing problems created by its expanding energy footprint. [It] has recognised the issue in its 12th five-year plan r­esulting in a coherent and consistent policy from central government down to local government,’ says Heller.

Fashion FORWARD Guangzhou's International Fashion Center.

essential part of this approach, especially given the vast numbers of people being ­urbanised in Asia,’ he shares.

However, according to Heller, politics still play a major role in the development of large-scale architecture and urbanplanning projects. The success of these strongly relies on the merged efforts of Heller Manus Architects and the political/ community leaders.

‘There is no way to keep the political process outside of the design process. The skill is in interpreting the political will into good design and liveable cities. What is important, however, is that politicians should certainly be good listeners in the design process. Without that, bad results happen,’ shares Heller.

With this teamwork in place, the v­ ision towards creating sustainable cities and provinces in China comes to ­realisation.

Making life more liveable

China’s green policy, as directed by its central government, is aggressively reinforced by its local government. While the rest of Asia is e­ xperiencing economic progress in this day and age, China was able to address expansion concerns better than its Asian ­neighbours.

He is currently working on high-speed transit and high-rise buildings which, he believes, play a big part of the sustainability equation.

‘I believe that tall buildings are an essential part of high-density s­ustainable urban planning. Urban cores that are more compact are more sustainable than those that are spread out. New York City and San Francisco are far more sustainable than Los Angeles. One of the keys to sustainable planning is to have compact urban cores where the need to use automobiles can be reduced by providing excellent public transit. Tall buildings are an

Though Heller’s profile may make him look like a serious superhero, he also has his own way of making his life more fun and liveable.

Many may not know about the ­fully operational amusement-size train that he has in his backyard, or the fact that, aside from being a talented ­philanthropist-architect, he is also a pizza connoisseur.

And even if the actualisation of his dreams of becoming a Formula One race car driver is still in question, he keeps himself busy with saving the world through architecture.

‘Diversification and perseverance are key to our practice’s longevity. ­Architecture is a very difficult and cyclical profession, and maintaining a practice over a long period of time ­requires a very high level of c­ ommitment and toughness,’ he concludes.

Bringing

Asian art world to the

Dominated mostly by Western names, the design industry may just be tad short of Asian designers who can wow the world. Fearlessly taking this challenge head-on are young, talented Thai designers Decha Archjananun and Ploypan Deerachai. Read about their inspirations and predictions in future design trends. By Ma. Teresa Dumana DYNAMIC DuO Young Thai designers Decha Archjananun (left) and Ploypan Deerachai (right) in their Bangkok workshop.

PHOTOS COURTESY OF THINKK STUDIO

D

echa Archjananun and Ploypan Theerachai have been taking the design industry by storm. Only in their late 20s, the sheer talent and fresh perspective of these young designers have propelled them to international success. Although it did take some time for Asian designers to penetrate the industry, the two believe that the time has come for Asia to be known beyond the region. In the past, Asians didn’t think that design was important. They focused only on price and massive trading, they relate. ‘Nowadays, people understand that design is one of the important factors to be successful.’

However, it is still quite hard to shake off Western influences in their work. So the hurdle to overcome is how to not lose their identity as designers – and as Asians – in the process. They say that crossing cultures ‘is a way to create something in between’, since some European brands also use Asian technique in their products. For them it’s very important to work hard and retain the good quality of

their designs to keep the momentum on their side.

Much like their European and Asian counterparts, Theerachai and Archjananun also use cross-culture, and this is very evident in their designs, which has been working well for them. In 2010, their design called Cover Crop won the Elle Decoration Thailand Design Awards 2009/2010 in the Seating Category. Also in the same year the Scrap Facet, a chair that uses scrap wood and various textures, won Honorable Mention in the Young Designers Category in the Furniture Design Award in Singapore.

These designs propelled them to international acclaim, and with them, their Bangkok studio called THINKK Studio.

Going beyond convention With the competition tough and getting tougher, Archjananun and Theerachai are constantly on their toes to make THINKK Studio rise above the rest. ‘We work on different design fields, from architecture to furniture and objects which allow us

to interchange our way of thinking. For instance, we [have] worked with architectural materials like marble or concrete, combined with industrial materials such as wood or steel for some design products,’ they say.

Adding to that, Theerachai says that they usually start on an idea separately but develop it together. She says that it is when their opinions differ that they come up with better solutions to design problems. For inspiration, they love to go somewhere different from their daily behaviour. ‘We believe that the inspiration comes from our experience so we have to collect it from everything, everywhere, as much as possible.’

With tons of inspiration to get the ball rolling, the duo entered ‘Doorobot’ in a competition called ‘A Door to Paradise’, which ‘enriches one’s perception of a door’.

Sponsored by Design Boom, Doorobot was among the entries submitted by 3,652 designers from 90 countries. The design was also featured in the Competition Booklet, which compiled 87 of the compe-

CONST LAMP On show at the Spazio Rossana Orlandi during the 2012 Milan Design Week, the concept for the Const Lamp (this page) is based on three simple elements: a base, body and shape, components that combine expression with function. ▶ 1. MERGING TOP Vases wtith concrete bases in wire frames.

2. ARMS CHAIR This ash wood-and-fabric armchair was designed to create unique form without sacrificing functionality.

3. SCRAP FACET The use of scrap wood allows this industrially produced chair to become a work of art and at the same time be available at a mass-production price.

4. TRI SIDE TABLE The combination of coloured and natural touch of wood creates a playful atmosphere to your room.

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www.propertylife.asia

tition’s most outstanding entries.

The two have also expanded their reach with their recent collaboration with another design house, Studio 248, founded by another Thai designer Jakkapun Charinrattana. This brought about the Arms chair, a multi-armrest chair that accommodates various arm positions and sitting gestures.

What makes the chair special? ‘We think there are not only Asian designers but many designers in the world who try to create something unique in terms of shape and material but rarely think about specific behaviours and gestures that people do on a chair,’ they share.

The Arms chair has been exhibited by the two collaborating studios in Ventura Lambarte and at the annual Salone Internationale del Mobile in Milan.

Minding the environment Another endeavour the two have undertaken is thinking up ideas on how to take care of the environment. With global warming issues taking top-of-mind im-

portance, Theerachai and Archjananun have also come up with designs to help ease consumption of electricity and water.

This environment-friendly project, called the Light Public Toilet, is an entry to a competition on sustainability called ‘Light Objects’. The project aims to decrease pollution and ‘helps sustain areas with low energy and water’.

The Light Public Toilet works by collecting rain water, passing it through a water-purifying system, and releasing the purified water for hand washing and flushing. After flushing, the water goes through another purification process to make it suitable for watering plants.

Meanwhile, solar energy powers the lighting and the water filtration systems.

Their other projects, like the Arms chair, uses only environment-friendly and recycled materials. ‘We have been using scrap wood and small pieces of wood left over from the manufacturing process as material for our design,’ they share. ‘Apart from the use of recycled materials, we think product durability is one of the im-

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portant factors of “green”’.

Thinking green and being green are just part of the trends in design. They do allow for sustainability and help preserve the environment, but according to the two designers, there are other factors that make trends in the industry move at a fast pace. They both believe that the global financial crisis will drive designers more towards minimalism and challenge them to do more with less, and to offer more for less. Extravagance will be a thing of the past. ‘Finishing techniques and colour will take an important role to make things different,’ they share.

For Theerachai and Archjananun, it is the responsibility of the designer to make this happen. The tight money situation may just turn out to be a blessing. ‘Some designers will find their own ways to manufacture their own products because big companies do not want to take risks on a new design.’ That should ensure that manufacturing shortcuts are avoided and that execution is done just as the designer ordered.

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www.propertylife.asia

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Life’s a beach Humans naturally long for water. The same is true when buying real estate. Here are seven properties that offer a fabulous beach lifestyle (not to mention good investment returns.) By Franz A. D. Morales

I

magine lounging in a sun chair, sipping piña coladas, the sound of a frothy surf flowing and ebbing through the sand whispering in your ear, while the smell of saltwater wafts through the air, tickling your nose.

Now imagine this scene as a typical evening for you as you unwind from the exhaust of your daily proclivities. Such is the life of living in a beach property of your own.

The hype that surrounds owning and living in a beach property is real.

There’s a reason why many of us dream of retiring by the beach, or spending our much-earned vacations on one. It’s a place where one can relax or spend the whole day being active, far away from the stresses of city life.

Types of beach properties The following is a quick rundown on some of the beach properties we have featured on the following pages.

There are many types of beachfront properties, and choosing one depends on your taste and budget. There are lofttype properties, much like condominiums facing the sea, and if you fancy this kind of beach living, you will feel right at home at The Lofts at Laguna Village in Phuket.

For those who have a taste for resortlike properties, the Dusit Thani Pool Villas – again in Phuket – is perfect. While those who prefer having a stand-alone beach villa for the ultimate in privacy, then Song Saa in Cambodia will be your piece of heaven on earth. If you are look-

ing for a five-star beachfront resort property in a high-profile beach, then Boracay Island in the Philippines should be your destination of choice. Voted by TripAdvisor as the Best Beach in the World in 2012, you will surely bask in the lap of luxury that only the five-star beachfront resort Aqua in Boracay offers.

From Phuket to the Philippines, Cambodia to Lombok, you will find some of the best beach villas available for you to live out your beach living fantasies in style.

Tips on buying With a glut of options available, no doubt the mere act of narrowing down your choices can be quite difficult. After all, buying your very own beach vacation house is a huge investment, not one to be approached casually.

To give you something to work with, here are a few tips to help you get started. It may not help you nail down your final choice, but it will help a lot when you shorten your list down to a few viable options.

Location. Obviously you’d want to own a property in an area you like, but you should also consider other factors such as the state of the housing market, seasonal weather and rental potential. This ensures that your investment will be a sound one by making sure that your investment holds up, the weather will be pretty much what you are looking for, and you have the option to rent the house when you are not there.

Set your budget. Set aside the costs you are willing to spend and figure out what it can buy you. When preparing your budget, take into consideration homeowners insurance and hiring someone to maintain the home.

House or condo? A beach house may have better privacy, but owning a condo includes maintenance, making it the more convenient option.

Beachfront or off-beach? Obviously a house that is by the beach is more expensive, and will appreciate more, but that would also mean your budget won’t get as much land as you will further inland.

Contact your agent. If you don’t have one, you can easily find one by asking your family or friends, or having your local legal representative find one for you.

Local agents know the area more, and give you the best deal they can find that is within your budget.

House inspection. Before committing to anything, have the house inspected by a professional, making sure everything is as they should be. For beachfront houses, have it looked at by a geological surveyor to make sure the house is on stable land, and that flooding will not be a problem in case of storms.

Take these into consideration before you buy, and you will have a more focused idea on which piece of property is right for you. Know the advantages and disadvantages of each type, and make sure you know what you really want. If you do things right, life in paradise awaits!

photos courtesy of laguna resorts and hotels

Dusit Thani Pool Villas Set in Phuket’s most exclusive address, Laguna Phuket, Dusit Thani Pool Villas offer privacy, comfort and convenience in the heart of paradise. With a beauty that rivals that of famous Caribbean and Mediterranean destinations, the beach villas in Dusit Thani make for the perfect holiday home.

Each villa has three floors and two bedrooms with features that include a functional pantry, a dining area for six, spacious living areas, and a patio with a sweeping view of the Andaman Sea or the calming lagoons that surround the area. The rooftop, For more information, visit www.dusitlagunavillas.com

with its 18-metre plunge pool, an outdoor shower, and a sundeck, caps off the already impressive features.

The villas have a built-up area of 292 square metres, with the plot area around 155 square metres. Prices start at US$799,000 wherein you can pay in full or use their deferred payment plan or financing options. Owners will enjoy special privileges and discounts at all Banyan Tree, Angsana, and Laguna Phuket Resorts and Hotels plus free regular golf membership at the Laguna Phuket Golf Club.

photos courtesy of claire brown realty

AQUA Boracay Aqua Boracay is a five-star beachfront resort nestled in Boracay beach in the Philippines – voted as the Best Beach in the World 2012 by TripAdvisor.

Units feature a spacious and comfortable design with an openplan kitchen and living areas. Luxury fittings by internationally renowned brands grace the homes, which are all exclusively designed by European architects. Owners also gain free access to world-class facilities such as the clubhouse, two large infinity pools, convention centre, private day spa, restaurants, resort facilities, and private parking. All properties have the option of

full hotel management that include concierge and guest services, laundry, housekeeping, gardening, maintenance and janitorial, 24-hour security, stand-by generator, and other services upon request, giving you the ultimate in luxurious, stress-free beach living.

Prices start at just US$250,000, making this an investment worth looking at. With conservative rental yields expected at 7–8%, the Aqua has exceptional capital growth potential.

Especially as the soon-to-open Boracay airport converts the area to international status by early 2014.

For more information, visit wwww.aquaboracay.com or www.clairebrownrealty.com

photos courtesy of claire brown realty

Meno Mojo Beach Resort Tucked away in the tiny island of Gili Meno off the north-western coast of Lombok in Indonesia, white-sand beaches, verdant flora, and lush fauna surround the luxurious Meno Mojo beach resort.

Peace and calm soothe the senses here where nary a car nor motorbike can be seen nor heard. Sheltered by neighbouring islands, Gil Meno is perfect for swimming, snorkeling and diving. The island is just across the waters from Bali and Lombok, and is easily accessible by both air and sea.

Meno Mojo resort will comprise of only 15 beach properties making it highly exclusive and private. The resort’s facilities will include an open air restaurant and bar, a shaded beachfront re-

laxation area, freshwater swimming pool, and private snorkeling pontoon. Prices will start at just US$195,000 for a fully furnished, one-bedroom villa – you can choose from either a beachfront or poolside villa.

With Lombok’s new international airport serving direct flights to Australia and South-East Asian hubs, the area is fast becoming one of the more popular tourist destinations in the region. Investors will find that the time to invest is now, with rental returns forecast at 10% over the first two years, with an 8% yield that’s guaranteed for the same time period. Invest in a piece of paradise, invest in Meno Mojo.

For more information, visit www.gilimenomojo.com; www.clairebrownrealty.com/meno.html

Laguna Village Phuket A community of luxury homes and villas, Laguna Village is located inside Laguna Phuket, one of the most sought-after addresses in Thailand. Residents of Laguna Village are treated to a host of amenities that include restaurants, bars, water sports, boutique shopping, and free membership to the Laguna Phuket Golf Club. The community is also a short distance away from Bang Tao Beach, a white-sand beach where you can sit back, relax, and live the good life.

Laguna Village offers several types of homes to choose from: Villas, Townhomes, Residences, Deluxe Townhomes, and Deluxe Residences.

The villas are two-storey, two-bedroom homes that overlook a shared swimming pool and tropical garden. The two bedrooms are located on the upper floor and have en suite bathrooms and

private balconies each. The ground floor of the units hold the living and dining areas which open to a sun deck. End units have a living area of 164 square metres with a total area of 260 square metres, while the mid unit’s area is 151 square metres with a total area of 233 square metres. Price is set at US$395,000 with deferred payment plans and financing options available.

The Townhomes, on the other hand, offer a little bit more privacy – being two-storey, semi-detached, three bedroom units with manicured gardens and a private swimming pool. Each of the three bedrooms have their own balcony with magnificent views. The kitchen and dining area is adjacent to the spacious living room. There is also a maid’s quarters with bathroom as well.

There are two models, the Baan Anchana and the Baan Bangtao, both with a living area of 234 square metres. Both models have a

photos courtesy of laguna resorts and hotels

total plot area of 465 square metres. Prices start at US$637,750 with deferred payment plans and financing options available.

For total privacy and exclusivity, Laguna Village Residences with its detached, two-storey, four-bedroom units that overlook a large private swimming pool and gardens fit the bill. With a stylish interior, spacious living and dining areas and a fully equipped kitchen, everything you need can be found here. Units also include four bathrooms and a maid’s quarters with bathroom. Total living area is at a spacious 350 square metres, and a total of 671 square metres including the pool and parking area.

Deluxe Townhomes are two-storey, semi-detached, three-bedroom units furnished with a modern Thai style. All fixtures and fittings combine functionality with aesthetic design. Features include a kitchen, dining and living areas, and private pool. You can

also opt to add a front wading pool, outdoor pool and Jacuzzi.

Units include fully landscaped gardens and a living area of 303 square metres, and total lot area of 529 square metres.

Finally, we have the Deluxe Residences. Inspired by Phuket’s Sino-Portuguese heritage, the Deluxe Residences feature total seclusion and space. The homes’ amenities include a large private swimming pool, garden, Thai sala, sun deck, and optional jet-pool and shower. The units can also be optionally furbished with furniture packages. A study room, walk-in closets, and skylights complete the villa. The living area is 452 square metres, with a total area of 846 square metres including the patio, garage, swimming pool and pond area. Price is at US$1.8 million with payment terms and financing options available.

For more information, visit www.lagunavillagephuket.com

photos courtesy of claire brown realty

Song Saa Island Resort Among the many islands just off the Cambodian coast in the Gulf of Thailand lies a private resort island unlike any other. Song Saa Private Island is a six-star resort composed of two private islands linked by a footbridge, and is just a 30-minute boat ride away from the international airport of Sihanoukville.

Featuring 27 luxury villas, a fine-dining restaurant, spa, wine cellar, watersports centre, a champagne cocktail bar, and other

fine amenities, you will find that life here is never dull. A gorgeous 130-square-metre villa on a private plot with private pool and beach frontage costs just US$600,000. Sold on a 99-year lease with no restrictions for foreigners, this makes Song Saa one of the best investments you can make. Rental returns are guaranteed at 8% net for 5Â years and there is an optional 50% mortgage package available for Claire Brown Realty clients.

For more information, visit www.songsaa.com; www.clairebrownrealty.com/song_saa.htm

photos courtesy of mandalay beach villas

Mandalay Beach Villas Set in the sandy expanse that is Laem Noi Beach in Koh Samui, Thailand, the Mandalay Beach Villas consist of seven exclusive beachfront pool villas in contemporary modern design.

Each villa’s area is about 350 square metres on plots ranging from 800 to 900 square metres. They each also feature a private courtyard, and direct beach frontage. All villas are inside a gated and secure community with concierge services and facility management services. Other features include an infinity pool with For more information, visit www.mandalaybeachvillas.com

Jacuzzi, RGB pool lights, a high-quality digital entertainment system, and a light system that can be controlled via an iPhone or iPad. Though planned as a three-bedroom plus maid room villa, at this early stage of development it is possible to redesign the villas to fit your needs (e.g. five- to six-bedroom homes on a double plot).

Prices vary depending on plot and build sizes, with the selling price starting at US$1.3 million.

Deals amidst the downturn The Spanish property market has definitely seen better times. But things may not be as bad as it sounds. By Rodel Ambas Jr.

Photos courtesy of Consell Insular D’ Eivissa

E

XOTIC AND VIBRANT would automatically come to mind when one thinks of Spain.

People always associate the country with lavish festivals, summer getaways, rich culture and gorgeous weather, making it one of Europe’s most popular tourist destinations. Data from the World’s Tourism Organisation show that 56.7 million international tourists visited Spain in 2011, the second highest in Europe, and 10 million more than the country’s population.

party town View of Ibiza from the fisherman's harbour.

However, people also associate Spain at the moment with the words debt-ridden, default and bank crisis. The country’s government is broke after years of massive spending, and will soon ask the International Monetary Fund for a bailout to salvage its banking sector.

So what does this mean for the country’s property market? There are scattered

reports of good sales and improved prices in some areas, but Spain’s property market is undoubtedly not in good shape. According to Chesby & Co.’s Peter Esders, the country’s domestic market is not moving, and it looks like foreigners are the only ones interested in buying. But sadly, even they are not buying in the same numbers.

As Spain’s property market has nosedived in the last couple of years, foreigners buying properties in the country are generally paying at record-low prices (and prices are likely to fall further). These peo-

old world Main entrance to the walled city of Ibiza.

This is where Spain as a tourist magnet comes in. Being one of the most visited countries on earth, tourists will flock to Spain regardless of its economic condition – and these tourists will need some form of accommodation during their stay in the country.

Hotspots

ple are also buying for personal use rather than investment, and they see their purchases as long-term investments and do not expect to make profits any time soon.

Buyers of Spanish properties at the moment may be considered lifestyle buyers: they are spending their own savings rather than using a mortgage; they are looking for properties for their own holiday use with a view to retirement in the future; and they are looking into renting out these homes when they are not using it.

According to Esders, there are plenty of good deals in Spain. It’s just a matter of choosing the right location. The islands of the Balearics and Canaries offer plenty of opportunities in this department, says SelectProperty.com.

Enquiries from overseas property hunters to Spain are said to have risen by as much as 33%, says Clare Nessling, director of mortgage specialist Conti. ‘Bargain prices and the opportunity to negotiate these down even further with some very motivated sellers mean that it’s most certainly a buyer’s market.’

The property price drop in Spain is now even more attractive to Asian buyers as the exchange rate between Asian currencies and the euro means that Asians get an even better deal. In addition, the value of homes in the Canary and Balearic islands has decreased by almost 7% over the past year according to Tinsa’s Spanish House Price Index for June. This is especially good news for cash-paying individu-

als purchasing properties on a buy-to-let basis for the purpose of a holiday home.

Also, a possible knock-on effect from the political and economic difficulties in Greece could be that more investors are turning to Spain. So says Jon Ainge, director of International Property Success, who explained the continuing turmoil in Greece is holding the value of the euro down, meaning the exchange rate between the single European currency and sterling is likely to be favourable for British buyers for some time.

Balearic Islands Each of the four islands that comprise the Balearics has a theme. Mallorca, the senior island, has a bit of everything, from mountains to the standard seaside tourism. Ibiza is synonymous with clubbing.

Menorca is a haven of tranquillity: isolated beaches and coves, and prehistoric monuments. And tiny Formentera, a chillout island, is the place where some people lose themselves for the entire summer, needing little more to keep them happy than white beaches and sunset parties.

Not surprisingly, properties on these islands are attractive to buyers due to high tourism rates.

Marc Pritchard, sales and marketing manager of Taylor Wimpey de Espana, said: ‘In spite of what is happening in

FEATURE S EPTEMBER— A U GUST— SEPTEMBER OCTO BER 201 20 122

Spain, many property investors still hold confidence in the market, recognising the Mallorcan property sector as one of the most resilient.’

The island has an abundant selection of properties for sale (partly because many people in financial trouble need to urgently sell their properties). According to real estate firm Balearic Properties, some of the properties they sold have reduced dramatically in price.

Examples of such properties include a villa in Pollença in Mallorca’s northern coast. Originally priced US$493,142 (€395,000), the three-bedroom, two-bathroom property now costs US$368,274 (€295,000). Another is a four-bedroom, three-bathroom villa in Bendinat. The 175-square-metre property costs US$755,237 (€605,000) and is close to Cala Bendinat, the municipality’s

Islas baleares The islands that make up the Balearics are shielded from the turmoil that currently affects the Spanish economy, thanks to healthy tourism returns.

famous beach. Over at Ibiza, Spain’s famous beach party spot, villas and apartments offer savvy property buyers good rental returns, especially during the summer months.

Real estate website Ibizapropertyshop. com lists a myriad of great deals, one of which is a luxury four-bedroom garden apartment in the island’s Cala Gracio area.

The US$699,017 (€560,000) apartment boasts of modern, fitted kitchen, marble floor, private garden and fantastic sea views.

With all of the negativity surrounding Spain’s economy and the eurozone crisis

at the moment, it’s refreshing to see that not all is bad with the country’s real estate market. Property investors are still keen on making purchases in Spain.

Nick Marr, director at Homesgofast. com, said the country offers ‘massive bargains. Buyers are treading gently and securing some great deals’. However, he cautions people to ensure they do things properly and seek the advice of professionals when looking into any homes outside their home countries.

Investing on Spanish property is more than just the money. It’s investing in a way of life. Some may argue that living in Spain automatically upgrades the quality of your life, and they’re not mistaken. Whether you choose a villa, a house, a flat or even a tiny apartment, remember this: there’s no judging houses in Spain, and there’s no place like it anywhere in the world.

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One-Ninety R e s ta u r a n t at t h e

Four Seasons Hotel Singapore Venture in unafraid. It’s not a decision you are likely to regret. By Jennifer Harrison

I

don’t often dine in restaurants found in hotels, especially seriously “posh” hotels. Although I know logically they are open to the general public, I somehow feel that I am intruding on a space reserved for hotel guests.

The Four Seasons in Singapore aims to dispel that common misconception, starting with their bistro grill, One-Ninety, located in the main lobby near the entrance.

As it is my job, I did my homework ahead of time, and so already had an idea of the incredible feast to be had. Yet I was still surprised by the warm welcome of the impeccably trained staff, the high-end décor, and mostly, by the personal greeting from both the Senior Sous Chef, Nicholas Owen, as well as the Executive Chef, Giovanni Speciale.

At once I jumped on this opportunity to make a personal request to the chef directly: could he please select our meal for the evening? Allow me just to say that I am far too clever for my own good.

The starters alone sent me over the moon, and I could have left at that point a very satisfied customer: fresh tiger prawns

and Alaskan king crab legs, as well as some of the best oysters on the half shell I have ever had.

Nevertheless, plate after plate arrived featuring some of One-Ninety’s best signature dishes, including Wagyu beef as well as a tomahawk chop (something I have never had before – a flavourful Fred Flintstone-sized beef rib). I’m also happy to report that the sea bream was cooked to perfection and there was a plate of gnocchi on the table (one of my favourites, grazie, Signor Speciale). There were, of course, seasonal veggies as well; but, aside from nearly diving head first in to the mashed potatoes, which were really mashed butter and cream with a little potato added in for good measure, my eyes remained squarely on the meat and fish.

And I haven’t even shared the best part yet: One-Ninety makes the best pâté de foie gras available in Singapore. It was lighter than air, perfectly balanced in flavour, and I wish I were eating it right now.

By the time dessert arrived, I didn’t need the sugar rush to feel giddy. But the chocoholic carb addict in me could not re-

sist. Save room, if you can – it’s worth it.

One-Ninety and its Italian-born and trained Executive Chef, Mr. Speciale, have taken great care to create a menu they can call their own. Featuring an “applewood grill,” they take an already excellent cut of meat or fish and add a depth of flavour that is unique and inspiring.

On behalf of the One-Ninety I would like to invite all food lovers – guests of the Four Seasons or not – to venture in unafraid. It’s not a decision you are likely to regret.

About the Executive Chef Giovanni (Gio) Speciale is the Executive Chef at Four Seasons Hotel Singapore, in charge of all culinary operations: the One–Ninety, specialising in applewood grill dishes with a selection of local and international favourites; the gourmet Cantonese restaurant, Jiang-Nan Chun; and The Bar and Alfresco, with indoor and outdoor dining options (including afternoon tea, in–room dining, conference and wedding banquets).

Hailing from Martina Franca in Italy, Chef Gio’s culinary career started in a two-Michelin-star restaurant in Italy. He then moved on to work at restaurants in the Philippines, United Kingdom, Thailand, Hong Kong and China.

One-Ninety is located at the main lobby level of the Four Seasons Hotel Singapore, 190 Orchard Boulevard.

For reservations call (+65) 6831 7250 or email one-ninety.sin@fourseasons.com.

Water towns

Two iconic Olympic venues, set apart by time, distance and culture, but both receiving the collective awe of the world in their architectural achievements.

By Jennifer Harrison Š LONDON 2012

Beijing National Aquatics Center Hailed as the most innovative architectural design in China since the Great Wall, the National Aquatics Center (or the Water Cube as it is more popularly known) is a must-see on anyone’s tour of Beijing, possibly in the whole of China.

In preparation for the 2008 Olympics, the Beijing National Stadium, also known as the Bird’s Nest, was designed for use throughout the Summer Olympics and Paralympics. Being somewhat circular in stature, designers felt that the neighbouring aquatics centre should be square in order to represent the popular Chinese cultural lore that the circle and square together represent heaven and earth.

What they ended up with was, in fact, a cuboid inspired by both molecular science and cutting-edge architectural design theory. And it is awesome.

At an international architectural competition in 2003, 10 design proposals were put forth and the winning team included architects from Australia as well as engineering and construction groups from China.

In its conception, the Australian

architects envisioned a steel structure coated in a type of polymer called ethylene tetrafluoroethylene, or ETFE, which is actually a type of teflon. Besides its well-known applications in the kitchen, the designers felt it would be an ideal construction material for several reasons: A It is safe because of its high melting temperature combined with its non-flaming properties B It is more transparent and has higher insulating property than glass, which means is it more energy efficient C With just 1% the weight of glass, it can bear 400 times its own weight D Due to its non-stick surface, it is self-cleaning E It is recyclable

Once the design and material were chosen, the architects now had to ponder how to build a model to show the selection committee. They decided to use an epoxy printer to construct a 3D model with 22,000 irregular beams and 3,500 pillows. Unfortunately nothing of this complexity had been tried before and the ‘printer file’ was over four times larger than anything previously printed. Up against time, the architects carved the structure into smaller units.

They then flew to Australia to ‘print’ the model, and returned to China – each architect with piece in their carry-on luggage!

What perhaps wowed the selection committee the most, however, was the application of ETFE towards design – the lining of the structure uses ETFE to form pillows that appear as bubbles. Not only appropriate for an aquatics centre,

but what seems to be a totally random pattern is in fact a fascinating and rigorous application of geometry, with uses that are often present in nature such as with crystals and even soap bubbles.

The more than 4,000 ‘bubbles’ were created by layering 634 translucent membranes of ETFE which were then swollen with air at low pressure.

Although each bubble is only 22 mm thick, the structure is incredibly strong because it follows nature’s strongest and most efficient formation: the 12- and 14-sided polyhedral honeycomb.

Truly it is organic in nature, molecular in structure, and geometric in its application. It is also so ultra lightweight that the building management company, Arup, believes the entire structure can be turned on its end and still maintain its integrity. Now that I would like to see.

Beijing National Aquatics Center Beijing, China ORIGINAL USE

2008 Summer Olympics TODAY’S USE

A water park open to the public CAPACITY

17,000

AWARDS

❶ 2004 Venice Biennale: Award for most accomplished work, Atmosphere section ❷ 2006 Popular Science: Best of What’s New 2006, engineering

COST

❸ 2008 NSW ‘Project of the Year’ award from the Australian Institute of Project Management

BUILT

❹ 2009 40th annual MacRobert Award, the UK’s biggest prize for engineering innovation

US$1.6 billion (RMB10.2 billion) 2004–2007 ARCHITECTS/CONSTRUCTORS

PTW Architects, CSCEC, CCDI, Arup

❺ 2010 International Association for Bridge and Structural Engineering 2010, Outstanding Structure Award

London Aquatics Centre In stark contrast with typical English austerity, the bold design of this Olympic venue helped London to win the bid to host the 2012 Games.

Within the state-of-the-art design of Beijing’s Water Cube for the 2008 Summer Olympics, more than 25 world records were broken. And before this year’s Summer Games commenced, many were wondering whether the London Aquatics Centre will be able to compete.

But that wasn’t the only debate at hand.

Was the design of the Olympic venue too contemporary for England’s penchant towards historical landmarks? The bold design is part of why London won the bid to host the 2012 Olympics in the first place.

Nicknamed ‘The Stingray’, the Aquatics Centre for the 2012 Summer Olympics is situated across from the Olympic Stadium on the opposite bank of the Waterworks River in London’s East End. As the most architecturally challenging construction design for the 2012 Summer Games, it is a demonstration of pre-cast concrete skills. This means the concrete, including a finer grade of aggregate stone, is moulded in a factory in a controlled climate and then transported to the construction site.

The moulds for casting the concrete can be used over and over again, which offers a significant cost reduction. It’s also safer to construct because the production occurs at ground level. And since the pre-cast concrete more closely resembles natural stone, it does not require cladding or painting, which is of course friendlier to the environment and, again, saves money.

In fact, it was initially reported that the aquatics centre would cost a mere US$116.4 million (£75 million), but in the end cost three times that amount. The architects and site managers blame an increased VAT as well as the estimated costs for converting the site into a public park following the Olympics.

Never mind. What they have created is a stunning example of simplicity – contemporary simplicity.

Internationally acclaimed architect Zaha Hadid designed the permanent structure where more than two-thirds of the spectators were to enter the Olympic Park via a bridge and then onto the Aquatics Centre’s roof.

And the roof is really what we’re talking about here. Wave-like in design, it rests atop just two concrete supports at the north and south ends of the structure. To begin with, two temporary supports were created and then, in one fell swoop, the entire 3,000-tonne structure was lifted up and placed back down on to its permanent concrete supports. Only after the roof was in place, the three pools inside could be dug out and fitted with more than 180,000 tiles.

Hadid describes her design: ‘A concept inspired by the fluid geometry of water in motion, creating spaces and a surrounding environment in sympathy with the river landscape of the Olympic Park. An undulating roof sweeps up from the ground as a wave, enclosing the pools of the Centre with its unifying gesture.’

She makes it sound like poetry in motion, but critics still suggest that it’s not exactly the work of Shakespeare. Concrete?

Water wings? Don’t worry, Queen Mum – the wings come down after the Olympics during its conversion to a public water park. Quite right.

© LONDON 2012

London Aquatics Centre London, United Kingdom ORIGINAL USE

2012 Summer Olympics

NOTABLE ZAHA HADID WORKS ❶ Rosenthal Center for Contemporary Art

FUTURE USE

A water park open to the public CAPACITY

17,000

(Cincinnati, Ohio)

❷ BMW Central Building

(Leipzig, Germany)

❸ Guangzhou Opera House

(Guangzhou, China)

COST

Includes the cost of converting the centre into a water park BUILT

2008–2011

❹ Riverside Museum

(Glasgow, Scotland)

❺ Phaeno Science Center

(Wolfsburg, Germany)

❻ Bridge Pavilion ARCHITECTS/CONSTRUCTORS

(Zaragoza, Spain)

Design Zaha Hadid Architects

© LONDON 2012

© LONDON 2012

© LONDON 2012

© LONDON 2012

US$417 million (£269 million).

James E. Harrison Harrison is the Commercial & Finance Officer at Panashco Media, publisher’s of Property Life magazine

PROPERTY INVESTMENT

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How do you know when you’re ready for property investment?

The wise and savvy investor lives by the tried-and-tested principles of investment, not fear, and certainly not instant gratification.

D

r iving home from work a billboard says, ‘Invest in your family’s future…Today.’ Is this a sign from the universe that your time to invest in property has come? Your local realtor would like you to think so. (This reminds me of another billboard I saw a few years back for a realtor named Jim. All I r­ emember is a giant, decapitated head looming from above and a caption that read, ‘You won’t get into a jam with Jim.’) Fancy tag lines aside, there is, of course, no cosmic message board that cues us to make big decisions in life. At least in terms of property or f­inancial investments; it’s Economics 101, my friends, with a fair dose of common sense.

Point One: Property investment is the use of ­excess income/capital to generate capital appreciation, to further income, or to leverage debt.

The first call on income is always board and lodgings, followed by some more obvious expenses like clothing and transportation – these are the costs of living. Of course, cost of living is different for different people due to individual expectations of what is actually necessary.

After the cost of living is deducted from your income and ‘rainy day’ savings are set aside, what remains is the disposable (excess) income.

Point Two: Property is not a liquid investment. You should only get in if you can stay in for the long haul. (‘Don’t wait to buy real estate. Buy real estate and wait.’)

Some properties are even less liquid than others, and any amount of liquidity can vary with the phases of the market. For example, expensive business-district apartments are very liquid in a good market, but almost impossible to sell in a down market; plots of development land may have no market value at any price in a down m ­ arket (something I personally learned the hard way).

As a general rule of thumb, I advise my clients that a highyield investment usually means lower liquidity. Fortunately for me, this segues nicely to my next point.

Point Three: The risk:yield ratio. Property investments are lowrisk, high-yield and long-term.

I remember my first property valuation lecture at university.

Professor Arniston came in very quietly and wrote ‘2%’ on the blackboard (showing my age here). He then turned to us and said, ‘What is this?’

Two per cent, he assured us, was the expected return/yield when buying property. Two per cent was equivalent to a 50-year payback period!

Woah! Let’s take a moment to step back and look at other types of investments and their risks.

High-risk investments include: Lottery – 1 in 14,000,000 Venture capital – 3–7 years Stocks and shares – 10% Low-risk investments include: Bank deposit account – 1.5% Government bonds – 2%

And then there’s property and land…

Property and land are more secure investments than bank accounts, right? Why, then, are people expecting/demanding higher returns?

1 Fear – specifically regarding holding power and the volatility of property prices.

2 Expectation – your neighbour ‘made’ 20% when they sold their property. Or you see on TV how couples buy undervalued properties, redecorate, and sell for a profit.

3 Instant gratification.

But it is the wise and savvy investor who lives by the triedand-tested principles of investment, not fear, and certainly not instant gratification. Not convinced? Consider this: in many countries the costs of buying property can very quickly top 10%. If the buyer intends to flip the property after 2 years, a 5% per annum yield is needed just to cover the costs.

Truly, a wise and savvy investor, at the end of the day, considers supply and demand (­ Economics 101), changing household sizes, shifting populations, perceived desirability and trends, disposable income, population growth and, not to be forgotten, necessity versus luxury. He or she knows that property investments may include student accommodation, airport warehousing, farmland, forestry, etc.

Now that you’re prepared to consider IF you are ready to invest in property, we shall now be able to delve further into WHY (see ‘Point One’ above).

See you next time.

W W W. P R O P E R T Y L I F E . A S I A

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