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Singapore drawing more foreign investors
Real estate news By Sonia Kolesnikov
September 27, 2007
When real estate developers visit new markets around the world, they generally view the trip as an investment in the future rather than an effort to actually sell anything. But when the Singapore developer Keppel Land went to Seoul at the end of May to promote Reflections at Keppel Bay, its luxury waterfront residential complex designed by the renowned architect Daniel Libeskind, more than 10 units were sold on the spot. "When we go on road shows to our more traditional markets, like Indonesia or Hong Kong, and sell anything more than five units over the weekend, it's considered a reasonable number because buyers will usually prefer to fly in to Singapore in the weeks after to check out the place before committing," said Albert Foo, Keppel Land's deputy general manager of marketing. "So to have people just walk in the exhibition room and plunk down a check, it's quite a feat."
But Koreans have been pouring millions into foreign real estate since 2006, when the South Korean central bank relaxed the controls imposed during the 1997-1998 Asian financial crisis. Last year they spent $780 million on overseas property, according to Bank of Korea data, and this year's total is expected to be far more as the Finance Ministry tripled to $3 million the total amount that an individual Korean can invest abroad. While the number of Koreans buying in Singapore remains relatively small, with only 128 buyers in 2006, that number still was a 132 percent increase in the previous year's total, according to data from Singapore's Urban Redevelopment Authority.
In the last two years, Singapore has been growing in popularity with foreign buyers, thanks in large part to the capital gains available in its booming property market. "Singapore has become much more of a global city," said Ong Choon Fah, the executive director in Singapore and regional head of consulting and research for the global real estate consultant DTZ. "I think generally the place is no longer just seen as a place to work, but also as a place to have fun," Ong said, referring to the addition of Formula One racing and casinos. Before the end of 2005, when Singapore's real estate market started to bounce back from the effects of SARS and some regional economic problems, foreign homebuyers were involved in fewer than 20 percent of all city purchases. But in the first half of this year, that share increased to 29 percent. (Most of the purchases are for condominiums because of continuing restrictions on the foreign ownership of land.)
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