Hong Kong investors snapping up apartments in Southeast Asia

PETALING JAYA (Sept 27): Hong Kong investors are setting their sights on Southeast Asian property, and Malaysia is also in their cross hairs, the South China Morning Post (SCMP) reported today.

According Colliers International, demand for investment property Southeast Asia has stayed firm, with total transactions of completed properties up 19% year-on-year in the first half of 2017 to around US$61 billion. (RM257.5 billion).

Hong Kong property investment in the region is also driven by the fact that prices there are a fraction of those in the former British colony.

Compare that with the HK$3 million (RM1.62 million) for a nano-sized (supposed to be the size of a typical parking lot) flat in Hong Kong.   

“Bangkok’s property prices are just about a quarter of Hong Kong’s. The location is also great, at the heart of Bangkok’s central business district near the Chinese embassy,” Hong Kongner Gordon Cheung told SCMP.

He bought a flat in Life Asoke Rama 9, a Bangkok project jointly developed by AP (Thailand) and Mitsubishi Estate Group.

The average price for units in that development was 12,542 Thai baht (RM1,596) per square foot, compared with the average price of HK$11,762 per sq ft in Hong Kong.

SCMP reported that more than 95% of Life Asoke Rama 9’s 154 units allocated to the Hong Kong market sold out within two days of going on the market.

“Properties in developed regions like Japan, Beijing and Shanghai are too expensive. Thailand has the best infrastructure among Southeast Asian countries, whose economies are catching up fast,” Vittakarn Chandavimol, chief condominium officer of AP (Thailand) told the Hong Kong daily.

According to a Financial Times report, rich Asians have bought up Thai apartments in soaring numbers, and lifting the sluggish property markets of Southeast Asia.

In Malaysia, Kuala Lumpur’s Sentral Suites project has sold more than 60% of the 30 units allocated to Hong Kong citizens, SCMP reported .

Sentral Suites is a serviced apartment project by MRCB located across the road from the country’s first transit oriented development, KL Sentral.

On a daily basis, KL Sentral records a footfall of 200,000, consisting of commuters, shoppers and a fixed working population in KL Sentral of about 60,000 to 70,000 people.

Situated on the 4.92-acre leasehold plot on Jalan Tun Sambathan, Kuala Lumpur, Sentral Suites comprises retail units and three 43-storey towers housing 1,434 units of apartments with built-ups ranging between 650 sq ft and 1,166 sq ft.

Sentral Suites targets young professionals who want to stay outside the city centre but prefer the convenience offered by a TOD.

“For Kuala Lumpur, gross rental return is about 4% to 6%. For Singapore it’s about 3% to 4%,” Binoche Chan, chief operating officer of List Sotheby’s International Realty, Hong Kong, told SCMP.