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Feb 23, 2009
Crisis delays Asian projects
Construction of South Beach has not yet begun.
Cautious Asian property developers are delaying
some residential projects and reconsidering others
during the worldwide crisis which has tightened funding
and crimped buyer interest, industry players said.
-- PHOTO: AGENCE FRANCE-PRESSE
THE simple sign announces 'South Beach' and calls it 'Singapore's New Lifestyle Quarter' but there is little sign of life at the collection of dilapidated military buildings.
S'pore developers hardest hit
Singapore has been among the hardest hit.
Two years ago global real estate firm Jones Lang LaSalle described the city-state's market as the world's hottest. Property prices surged 31 per cent overall in 2007.
... more
The abandoned camp was to become a US$1.1 billion (S$1.7 billion) luxury hotel, office, retail and residential project known as South Beach.
Instead, it has become a symbol of the global economic downturn. Construction of South Beach has not yet begun.
Cautious Asian property developers are delaying some residential projects and reconsidering others during the worldwide crisis which has tightened funding and crimped buyer interest, industry players said.
Tight lending conditions during the worst economic crisis since the Great Depression of the 1930s are partly to blame for deferrals, industry players said.
Pairote Sukjan, president of Buathong Property in Bangkok, told AFP the crisis prompted Thai banks to cut back on lending to both condominium developers and buyers.
'Several condominium projects were delayed or cancelled because developers could not get loans from banks easily,' Mr Pairote said.
Real estate companies are still having difficulty securing debt at reasonable spreads, Macquarie Research said.
Developers 'must face reality'
According to media reports, China's biggest property developer by market value, China Vanke, said it postponed two residential projects last year, one each in Shanghai and Shenzhen.
The company's Shanghai-based spokesman, Li Yan, confirmed this without giving specific reasons.
China Vanke said in its third-quarter financial report that it would adopt a more cautious approach towards expansion.
'Together with other strategies such as cutting prices, property developers are trying out all kinds of means to endure this cold financial winter,' said
Hui Jianqiang, an analyst with the research firm Shanghai E-house R&D Institute.
India's top listed property firm, DLF, recently reported that consolidated net profit for the third quarter fell 68.7 per cent, hit by a liquidity crunch and a slowdown in large construction projects.
Rajiv Singh, the firm's vice chairman, said it would exercise caution and focus on timely completion of existing projects.
Malaysia will face delays in completion as developers cope with a tight credit market and large future supply, said Chua Chor Hoon, senior director for DTZ Research.
But the situation in Hong Kong is more positive, analysts said. 'In Hong Kong, the future supply is tight due to shortage of land supply. Hence there has been no delaying of projects recently,' Mr Chua told AFP.
Still, analysts said the economic downturn has led to sharp price falls in Hong Kong's luxury market. Local media reported last week that developers are engaged in a price war, slashing values by as much as 40 per cent.
The Standard newspaper quoted Richard Lee Chin-shing of Hong Kong Property Services as saying developers 'are being forced to face reality and must sell properties at prices the market can bear'.
Regionally, government stimulus measures introduced to fight the economic crisis could entice potential property buyers, Keppel Land said in its January earnings report. For the moment, though, there is nothing to lure anyone through the battered and rusted gates of the South Beach site.
Crisis delays Asian projects
Construction of South Beach has not yet begun.
Cautious Asian property developers are delaying
some residential projects and reconsidering others
during the worldwide crisis which has tightened funding
and crimped buyer interest, industry players said.
-- PHOTO: AGENCE FRANCE-PRESSE
THE simple sign announces 'South Beach' and calls it 'Singapore's New Lifestyle Quarter' but there is little sign of life at the collection of dilapidated military buildings.
S'pore developers hardest hit
Singapore has been among the hardest hit.
Two years ago global real estate firm Jones Lang LaSalle described the city-state's market as the world's hottest. Property prices surged 31 per cent overall in 2007.
... more
The abandoned camp was to become a US$1.1 billion (S$1.7 billion) luxury hotel, office, retail and residential project known as South Beach.
Instead, it has become a symbol of the global economic downturn. Construction of South Beach has not yet begun.
Cautious Asian property developers are delaying some residential projects and reconsidering others during the worldwide crisis which has tightened funding and crimped buyer interest, industry players said.
Tight lending conditions during the worst economic crisis since the Great Depression of the 1930s are partly to blame for deferrals, industry players said.
Pairote Sukjan, president of Buathong Property in Bangkok, told AFP the crisis prompted Thai banks to cut back on lending to both condominium developers and buyers.
'Several condominium projects were delayed or cancelled because developers could not get loans from banks easily,' Mr Pairote said.
Real estate companies are still having difficulty securing debt at reasonable spreads, Macquarie Research said.
Developers 'must face reality'
According to media reports, China's biggest property developer by market value, China Vanke, said it postponed two residential projects last year, one each in Shanghai and Shenzhen.
The company's Shanghai-based spokesman, Li Yan, confirmed this without giving specific reasons.
China Vanke said in its third-quarter financial report that it would adopt a more cautious approach towards expansion.
'Together with other strategies such as cutting prices, property developers are trying out all kinds of means to endure this cold financial winter,' said
Hui Jianqiang, an analyst with the research firm Shanghai E-house R&D Institute.
India's top listed property firm, DLF, recently reported that consolidated net profit for the third quarter fell 68.7 per cent, hit by a liquidity crunch and a slowdown in large construction projects.
Rajiv Singh, the firm's vice chairman, said it would exercise caution and focus on timely completion of existing projects.
Malaysia will face delays in completion as developers cope with a tight credit market and large future supply, said Chua Chor Hoon, senior director for DTZ Research.
But the situation in Hong Kong is more positive, analysts said. 'In Hong Kong, the future supply is tight due to shortage of land supply. Hence there has been no delaying of projects recently,' Mr Chua told AFP.
Still, analysts said the economic downturn has led to sharp price falls in Hong Kong's luxury market. Local media reported last week that developers are engaged in a price war, slashing values by as much as 40 per cent.
The Standard newspaper quoted Richard Lee Chin-shing of Hong Kong Property Services as saying developers 'are being forced to face reality and must sell properties at prices the market can bear'.
Regionally, government stimulus measures introduced to fight the economic crisis could entice potential property buyers, Keppel Land said in its January earnings report. For the moment, though, there is nothing to lure anyone through the battered and rusted gates of the South Beach site.
