Feature - Growth Opportunities In Asia

EARLY HEADSTART IN REGIONALISATION

Keppel Land began expanding into the Asia-Pacific region in the late 1980s. The primary aim was to enhance the breadth and depth of Keppel Land’s earnings base and to provide the Group with more balanced and diversified earnings drivers.

Keppel Land’s overseas efforts led to several major investments across Asia. Major landmark projects undertaken by the Group include the internationally acclaimed Spring City Golf and Lake Resort in Kunming, China, the Taman Sutera township in Skudai, Johor, Malaysia and the Ria Bintan Resort in Bintan, Indonesia.

To date, Keppel Land’s overseas investments are well spread out over nine countries in the Asia-Pacific – Singapore, China and Hong Kong, Thailand, Vietnam, Philippines, Malaysia, Indonesia, Myanmar and Australia. The Group aims to grow its overseas assets to 30% in the near future.

SHIFT IN FOCUS TOWARDS PROPERTY DEVELOPMENT FOR SALE AND PROPERTY FUND MANAGEMENT

Asia will be Keppel Land’s main focal of development in the short- to medium-term. However, the Group will now focus on growing property development for sale and property fund management to generate faster and better returns. The market dynamics of the real estate business, which is now very much yield-driven, have prompted Keppel Land to de-emphasise property investment given its long gestation cycle.

Prospects for property development in Asia are promising. Economic prosperity and increasing flow of foreign direct investments into emerging Asian countries have led to demand for institutional-grade commercial buildings and prime residences for owneroccupation and investment. Keppel Land is quick to seize these opportunities, particularly in housing development, and is beginning to see its investments bearing fruits now.

Keppel Land has also ventured into property fund management, which is still in its infancy in Asia.

Since the Asian financial crisis in 1997, the Asian real estate markets have undergone significant price correction and valuations in some markets are now supported by good income yields and potential for capital gains. Improved valuations and the opening up of markets that are previously closed to foreign investors have since attracted considerable interest from global institutional investors.

REGIONAL THRUST IN HOUSING DEVELOPMENT

Keppel Land aims to be a leading developer of quality housing in the Asian region. For now, it will focus on the growing economies of China, Thailand and Vietnam. Political stability, good economic fundamentals and favourable demographic trends are factors behind the Group’s optimism about these markets. Backed by the rising wealth effect and government support in promoting homeownership, these markets are seen to offer great potential for real estate development, especially residential developments that cater to the middle and upper-middle income groups.