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CapitaLand building more affordable homes in China

Posted on 15 Nov 2009 | Comments Off

Plans also to grow serviced apartment arm, double Raffles City developments

PROPERTY giant CapitaLand is gearing up to build more of its Raffles City developments, affordable homes, shopping malls and serviced apartments in China over the next five years.

Mr Liew (left) and Mr Lim opening CapitaLand’s ’15 years in China’ exhibition at Raffles City Singapore yesterday. — PHOTO: CAPITALAND

It had earlier announced its target of expanding China’s share of its total business from the current 28 per cent to between 35 per cent and 45 per cent within the next three to five years.

And this, said the president and chief executive of CapitaLand group Liew Mun Leong yesterday, includes building a lot more affordable homes rather than high-end housing, to meet the housing needs of ordinary people.

China’s housing demand is no small matter: The country needs 20 million homes every year, said Mr Liew.

CapitaLand, which has so far built 35,000 homes in China, will continue to build about 2,000 to 3,000 homes a year in the country, said the deputy chairman of CapitaLand China executive committee, Mr Lim Ming Yan.

That number goes up to as many as 5,000 homes a year, if its strategic partnerships are included, he said.

Mr Liew also wants to have a total of 10 Raffles City developments in China in five years’ time, up from the current five.

No. 6 is already ‘cooking’, he told The Straits Times yesterday at the opening ceremony of CapitaLand’s ‘15 years in China’ exhibition at Raffles City Singapore.

He said he could not disclose the location as negotiations are ongoing.

The group launched its fifth Raffles City project in China – in Ningbo – in June this year.

It also has completed Raffles Cities in Shanghai and Beijing, and ongoing projects in Chengdu and Hangzhou.

Every Raffles City represents an investment of around $1 billion, and consists of a mall, offices and either a hotel or serviced apartments, Mr Liew said.

CapitaLand’s serviced apartment arm Ascott will also grow in China – the place to be for the ‘the depth and width of the market’, said Mr Liew.

‘China has grown an average of 10 per cent per annum for the past 30 years and is forecast to overtake the United States as the world’s largest economy by 2020,’ he said yesterday.

‘China is our most successful overseas market and will continue to grow given the demographics, massive urbanisation programme and economic growth.’

CapitaLand entered China in 1994 and has become one of the top foreign developers there. It now has more than 106 projects in more than 40 cities.

About half of its employees are in China, and many of them are Chinese nationals.

Its staff are so well-trained that many of them have been poached, Mr Liew told the audience gathered at the opening ceremony.

Meanwhile, CapitaLand reportedly said that there had been good investor response to the planned US$2 billion (S$2.8 billion) IPO of its shopping mall unit CapitaMalls Asia.

Source : Straits Times – 14 Nov 2009

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Posted in Developers, Overseas Property

Tagged Capitaland, China Property, Liew Mun Leong

Getting back on track

Posted on 15 Nov 2009 | Comments Off

Stopping the bubbles

HONG KONG Chief Executive Donald Tsang warned yesterday that asset prices in places like Singapore, South Korea and Taiwan were ‘incompatible and inconsistent with economic fundamentals’ and could lead to bubbles.

Mr Tsang told the Apec CEO Summit at the Suntec ballroom that the seeds of financial crises often come from government-implemented fiscal and monetary policies.

He cited the steps Japan took during its recession in the early 1990s and cautioned that the measures the United States is now implementing may lull it into a similar policy trap.

In the 1990s, near zero interest rates drove resources out of Japan and into the rest of Asia, which was experiencing rapid growth. This led to Tokyo becoming one of the biggest lenders in the world.

But it eventually led to asset bubbles forming in Asian countries, which imploded during the 1997 financial crisis and hurt Japan.

‘Leaders need to watch out… America is doing exactly what Japan did the last time with reduced interest rates and encouraged lending,’ said Mr Tsang.

He added that the weakening US dollar has replaced the yen as the currency of choice for carry traders with investments pouring into Asia.

He said the influx of capital was driving up asset prices in Asian countries – a worrying trend because they were ‘out of sync’ with the Asian export portfolio and its internal capacity.

‘Leaders need to look at these issues with foresight to prevent a repeat… There is a need for global cooperation since the world is so well connected now,’ he added.

World Bank president Robert Zoellick also identified Asian asset bubbles in an interview with Bloomberg on Wednesday, warning that they that could pose risks to the global economy next year.

He said that the region must be vigilant and that solutions will not be easy, although he suggested using other tools before raising interest rates to contain asset price surges.

Source : Straits Times – 14 Nov 2009