PropertyGuru Property Report , Issue No. 162 (October - November 2020)

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34 MANILA’S BROTHERS IN ARCHITECTURE

MOON’S GLOW FADES FAST 87

26 MULBERRY BOOSTS FAMILY THAIS

CHINA MARKET ROARS BACK 84

56 SNOW BUSINESS LIFTS JAPAN

MIXED NEWS IN SOUTH ASIA 66

USD10; SGD13; IDR135,000; MYR41; THB330

NO. 162 PROPERTY-REPORT.COM

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Torre Lorenzo Development Corporation

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ISSUE 162 Publisher Jules Kay Editor Duncan Forgan Deputy Editor Al Gerard de la Cruz Senior Editor Richard Allan Aquino Digital Editor Gynen Kyra Toriano Media Relations Manager Thaddeus Siu Senior Media Relations Executive Tanattha Saengmorakot Media Relations Executive Piyachanok Raungpaka Marketing Manager Marco Dulyachinda Editorial Contributors Tricia Morente, Liam Aran Barnes, Bill Bredesen, Diana Hubbell, Steve Finch Head of Creative Ausanee Dejtanasoontorn Senior Graphic Designer Poramin Leelasatjarana Sales Director Udomluk Suwan Regional Business Development Manager Kanittha Srithongsuk Corporate Partnerships Executive Chayanee Chavaratanachai (Fiona) Amonlapa Somtaveesilp (Mickey) Regional Solutions Manager Orathai Chirapornchai Business Development Manager, Corporate Sales (Singapore) Alicia Loh Solutions Manager (Thailand) Kritchaorn Rattanapan Rattanarat Srisangsuk Solutions Manager (Philippines) Marylourd Pique Maria Elena Sta. Maria Solutions Manager (Vietnam) Quan Nguyen Solutions Manager (Indonesia) Amanda Michelle Wulan Putri Solutions Manager (Cambodia) Phumet Puttasimma Solutions Executive (Malaysia) Samuel Poon Solutions Manager (Australia) Watcharaphon Chaisuk (Jeff) Solutions Manager (Mainland China, Hong Kong and Macau) Huiqing Xia (Summer) Kai Lok Solutions Manager (Myanmar) Nyan Zaw Aung (Jordan) Solutions Manager (India and Sri Lanka) Monika Singh Distribution Manager Rattanaphorn Pongprasert Editorial Enquiries duncan@propertyguru.com Advertising Enquiries petch@propertyguru.com Distribution Enquiries ying@propertyguru.com PropertyGuru Property Report is published six times a year by

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Partnership opportunities are available for 2020 Find out how to be part of the region’s biggest real estate awards series. Essential for any business or brand looking to reach high-net-worth serial real estate investors across established and emerging markets in Asia and beyond. Contact Ms. Kanittha Srithongsuk, Regional Sponsorship Manager, kanittha@propertyguru.com | +66 87 708 5237 AsiaPropertyAwards.com

© 2019 by PropertyGuru Pte. Ltd. All rights reserved. No part of this publication may be reproduced without prior permission of the publisher KDN PPS 1662/10/2012 (022863)

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CONTENTS | Issue 162

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Trends

Style

Gadgets

Statement, standout furniture pieces for your interiors

With Halloween on the horizon, it is the season to get spooky

Tech essentials to throw a virtual party in these solitary times

Neighbourhood Watch: Hirafu

In Depth: Home away from home

Destination: South Asia

The liveliest of Niseko’s four ski villages, Hirafu is hooking buyers due to its worldclass lifestyle options and investment opportunities

Geographical proximity, solid profitability, and a transparent real estate market have all contributed to Australia’s soaring popularity with Asian investors and developers

The various nations of South Asia all have cause for cautious optimism as the postpandemic world moves into view

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Project Confidential: A family affair

Interview: Chips off the old block

Design focus: Up the function

Destination: Myanmar

Dispatch: Crisis? What crisis?

Dispatch: Bad Moon rising

Thailand’s greying population and tradition of intergenerational engagement are key factors in the conceptualisation of Mulberry Grove Sukhumvit

Armed with progressive design principles and a ferocious work ethic, twins Gil and Gary Coscolluela are proving worthy custodians of a famous family tradition

His firm PTI Architects may be behind some of Indonesia’s most striking designs, but Doddy Tjahjadi is mindful of prioritising substance over style

Sluggish sales of upscale projects are forcing a shift in the country’s real estate sector, with developers forced to better tailor product to the needs of the market

A stunning rebound in China’s residential market has confounded predictions of a difficult year

South Korea’s recently reelected government is reeling as property values continue to soar out of control across the nation

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EDITOR’S NOTE Issue 162

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In a year as seemingly bleak as this one it seems almost counter-intuitive to spotlight positives.

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Nevertheless, as an epochal 12 months enters its final throes, some green shoots for the post-pandemic world are beginning to make themselves apparent.

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In China, ground zero for the outbreak of Covid-19, markets in big cities around the country are witnessing an upsurge in buyer activity.

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Elsewhere, sentiment in South Asian countries like India and Sri Lanka is beginning to tilt towards cautious optimism. Even Myanmar, a country that has seen a massive stasis in its real estate sector, is eyeing growth through massive infrastructure projects. In this, our emerging markets issue, we attempt to take temperatures of these and other countries around the region as they look beyond 2020 towards an uncertain future. Elsewhere in this edition we journey Down Under to investigate why Australia exerts such a strong pull for Asian investors and developers. On the design front, we chat to siblings Gil and Gary Coscolluela about their attempts to uphold a proud family tradition and journey to Jakarta to showcase the work of influential practice PTI Architects. Other highlights, meanwhile, include some snow business in Hokkaido and the inside track on one of Bangkok’s most family-orientated living solutions.

Duncan Forgan Property Report duncan@propertyguru.com

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ADVERTORIAL

CENTRAL PERKS An amazing location and top-notch facilities, among others, make Jadescape by Qingjian Realty one of the smartest choices for condominium living in Singapore

ADVERTORIAL range, evoking the feeling of a mountainscape in sumi-e painting. Since education is important to most Singaporean families, those with young children take into consideration proximity to schools in their home ownership decisions. JadeScape is an ideal location for such families because it is situated less than a kilometre away from Catholic High School. Respected institutions such as Ai Tong School, Marymount Convent School and Kuo Chuan Presbyterian Primary School are also located within one to two kilometres of JadeScape.

pool for the active individuals and a pets corner for the pets lovers. It even has two sky terraces with a seating lounge and sky cabanas to savour those much-needed quiet moments. Picturesque and strategically located, Jadescape is indeed a compelling project to consider in one’s next property search.

The Shunfu-Thomson area that surrounds JadeScape teems with many F&B options. Residents can dine at the nearby Shunfu Mart and Food Centre, known for eateries such as Chocolate N Spice with its famous muffins, Heng Heng Bao Bing with its delicious popiah, and the Leong Hainanese Chicken Rice. Renowned eateries like Sing Ming Roti Prata, Casuarina Curry Restaurant and Sushiro Japanese Restaurant are also just within the vicinity of JadeScape. Property seekers can choose from a variety of one-, two-, three-, four- and five- bedroom and penthouse units at JadeScape. The development also has over 100 facilities, catering to different homeowners of different lifestyle needs. There is a games room, kid’s club, adventure playground, maze garden for kids, theatrette and karaoke rooms for family entertainment, heated massage jet, Tai-Chi lawn and foot reflexology for the elderly, virtual golf, tennis court, and 50m skyline Many property seekers in Singapore look for a centrally located abode where multigenerational households can live together in harmony amid well-landscaped, verdant surrounds, with easy access to transport infrastructure hubs and retail and F&B amenities, supermarkets and academic institutions. Qingjian Realty has made such an address possible with the introduction of its mega-scale condo development Jadescape. Located along Shunfu Road in ThomsonBishan estate, the development is only minutes away from the 12-hectare expanse of nature known as MacRitchie Reservoir. This seven-tower development can support multi-generational households and is a good fit for property seekers with goals of active living. JadeScape is centrally located and boasts access to not one but four MRT lines – easily an advantage over many residential developments in Singapore. The development is only a three-minute walk from Marymount MRT station along the Circle Line. The Marymount station is, in turn, just one stop away from Bishan MRT station on the North-South Line. 18

Artist's Impression

With the nearby Upper Thomson MRT station due to open soon, residents of JadeScape can easily access the Thomson-East Coast Line, too. Residents can also look forward to the completion of the Cross Island Line, one of Singapore’s longest underground lines, which connects passengers to both eastern and western portions of the country. Driving to and from JadeScape is also convenient as it is close to two expressways, PIE and CTE, as well as the upcoming North-South Corridor. All in all, residents of JadeScape are only 15 minutes from the Orchard shopping belt and the CBD. Apart from its proximity to transport hubs, JadeScape is only five minutes away by car from MacRitchie Reservoir Park. In fact, most units in the development’s 23-storey residential buildings look out to uninterrupted, panoramic views of the park. JadeScape follows an Asian garden theme, inspired by the serenity of the nearby reservoir. Acclaimed architect Paul Noritaka Tange envisioned Jadescape as a mountain

Artist's Impression

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DETAILS | Trends

HOME COMFORTS

SILVER SPOON Furnish your refuge with Homey Design’s living room sets, especially the silvery HD-372 collection with its solid wood construction, ornate carved wood frame, hardwood legs, padded rolled arms, and floral-pattern upholstery.

Some statement, standout furniture pieces for your interiors at a time when you’re likely to be more appreciative of domestic bliss than ever

USD5,700, homeydesign.com

SLICK SLEEP A favourite of RHONY’s Sonja Morgan, this mattress by Italy’s Zinus comes with olive oilbased memory foam, which feels silky smooth to the touch, and a base layer of pocketed trademark iCoil springs that relieve pressure points and reduce motion transfer.

$649, zinus.com

HERCULEAN TASK SUPER SPREADER TAKE IT OUTSIDE For your patio, consider Wade Logan’s Castelli sofa made of handwoven grey resin wicker, the best material to withstand outdoor elements. The companion foam cushions are as weather-resistant, wrapped in Sunbrella fabric with PVCmesh bottoms to drain out moisture.

From $1,459.99, wayfair.com

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The CB2 Paradigm table combines a thin top of Carrara marble over an aluminium honeycomb core with widely spaced iron legs finished in antiquated brass—a timeless nod to French kitchen aesthetics. The 54-inch version can seat six; it also has an 80-inch version.

$1,100, cb2.com

The handpainted Gear coffee table, designed by Kristian Sofus Hansen and Tommy Hyldahl for Norr11, has three riffled legs akin to ancient Grecian columns, supporting a sturdy tabletop.

$578, danishdesignstore.com

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DETAILS | Style

SCARE TACT ICS

DEVIL’S DETAILS Renowned Christmas ornament maker Department 56 has unveiled the Trick or Treat Lane Party House, a miniature, light-up ceramic house with painstaking attention to minute details such as autumn leaves and purple and silver tinsel.

With Halloween on the horizon, it is the season to get spooky. Put yourself in the mood with these autumnal holiday décor and wares

$130, department56.com

FRIGHT LIGHTS The ceramic Halloween tree by RJ Legend is a spooky delight, ringed by more than 50 purple and orange LED lights and topped and surrounded by tiny jack-o’-lanterns. Take that, Christmas tree.

From $45, rjlegend.com

DEARLY BELOVED

SOAKED TO THE BONE Pottery Barn’s new Skeleton Hand Punch Bowl with Ladle will make for a spellbinding table attraction on All Hallows’ Eve. Crafted of soda lime glass with zinc alloy, the quirky bowl can hold up to five quarts of punch.

$99.50, potterybarn.com

WOVEN SPELL If carving jack-o’-lanterns is not your thing this year, opt for Pottery Barn’s new handwoven pumpkins, which captures the unmistakable silhouette of gourds in natural rattan. Available in medium and small versions.

Can’t be in Mexico for the Day of the Dead? Mark the occasion in your own special way with a wreath of marigolds (plus yarrows and white statices) handcrafted by Creekside Farms.

$76, creeksidefarms.com

From $29.50, potterybarn.com

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DETAILS | Gadgets

YOU ARE NOT ALONE

PRIVATE MATTER The Pure DiscovR offers the same market-leading Alexa voice assistance with the added option of being able to cut off the microphones when its X-Span speaker retracts.

EUR199.99, pure.com

One thing catching on fast besides the pandemic is videoconferencing. Here are some tech essentials to throw a festive virtual party in these solitary times

HALOED BEING Put your best face forward with the Emart Standing Ring Light. Hoisted on a tripod that can be adjusted up to 70 inches, this brilliant source of illumination spotlights you in three light modes and 11 levels of brightness.

$99, emartus.com

BUG OFF

BIG EYES

HUMAN TOUCH Zoom, the pandemic’s favourite teleconferencing tool, has introduced Zoom for Home DTEN ME, a 27-inch touchscreen display equipped with three wide-angle cameras and an eight-microphone array. It makes for a clearer audio-visual experience.

$600, zoom.us

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The Meeting Owl speaker is a perfect combination for online gatherings. The 360-degree, 1080p camera can capture crystalline, autofocused images and intelligently zoom on anyone speaking, while the 5.5m-radius mics easily picks up audio.

It’s not really a Zoom pandemic party without sanitiser on hand. Take it up a notch with the Momax UV-C LED sanitising pen, which obliterates 99.9 percent of pathogens on surfaces within 30 seconds.

GBP59.95, momax.net

From $799, owllabs.com/meeting-owl

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A FAMILY AFFAIR Thailand’s greying population and tradition of intergenerational engagement are key factors in the conceptualisation of Mulberry Grove Sukhumvit: a multi-faceted living solution in the heart of Bangkok BY AL GERARD DE LA CRUZ

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THE BUILDING COMMANDS UNINTERRUPTED VIEWS OF THE CHAO PHRAYA RIVER AND BANG KRACHAO COMMUNITY AS WELL AS THE NEIGHBOURHOODS OF EKKAMAI AND THONGLOR, AS SEEN THROUGH EXPANSIVE FLOOR-TOCEILING WINDOWS IN THE JAPANESE ONSEN (TOP) AND PRIVATE STYLE ATELIER (BOTTOM)

The answer lies in a 4,000-squaremetre corner plot in central Bangkok’s posh Ekkamai neighbourhood, where a hospital, an international school, and a BTS train line are all within walking distance. Set to rise is a vertical living solution for multigenerational families: Mulberry Grove Sukhumvit, a 150-metre tall tower “designed for the finest intergeneration living.” “When we were choosing the location, the first priority was to not compromise on the needs of any generation—ours, our grandparents’, and those of our children. We wanted all generations to feel they belong to this project,” says Roongrote. When MQDC shared their THB6 billion ($190 million) vision with Singaporebased architecture practice HB Design, the design brief was “very deliberate”, recounts Hans Brouwer, director and design lead for HB Design. “It was not a brief about form or anything else, but a concept—‘multigenerational city centre, high luxury living’. That was a very clear directive that comes from the large amount of research they’d done on the marketplace. They were looking to create this product, in this location, to suit a particular market niche,” he relates.

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ith approximately 18% of its population—almost one in five people—now aged 60 and above, Thailand is inching closer towards becoming a full-fledged ageing society. At this rate, the UN predicts, over 30% of the population will be sexagenarians and older by 2035. Thai developers have been enterprisingly cognizant of this demographic shift—perhaps none more so than Magnolia Quality Development Corporation (MQDC), whose widely acclaimed R&D arm, Research & Innovation for Sustainability Centre (RISC), found in a recently conducted study how filial piety still holds powerful sway over the Thai people, even those based in cosmopolitan Bangkok. “Our research revealed people are experiencing less happiness because they are engaging less than ever with family members, are under a lot of societal pressure, and desire more privacy,” observes Roongrote Chongsujipan, senior vice president for MQDC. “We knew from the beginning of our research that families tend to live away from each other. How, then, can we bring them back together?” 28

MULBERRY GROVE SUKHUMVIT IS WINNING OVER GENERATIONS OF PROPERTY SEEKERS ACROSS THE BOARD WITH AN ART DECO-INSPIRED FORM AND LOFTY HEIGHT ENVELOPE THAT PLACES ALL UNITS ABOVE SURROUNDING BUILDINGS AND THE BTS – AN EGALITARIAN APPROACH THAT CREATES UNOBSTRUCTED HORIZONTAL EXTENSIONS FROM ALL HOMES

HB Design’s architects, who have worked with MQDC since 2014, had been designing for a different site when the opportunity came up with MQDC to change site specifications. The problem: the architects had already designed the building. “There was a kind of resistance to that change in the beginning really,” Brouwer recalls with a laugh, “but in the end, we got a much better product. Ultimately it became a really interesting, bigger project.” Looming 37 storeys over Bangkok, the future 286-unit development offers generously cut units averaging 80 sqm—starting from 47 sqm for onebedroom homes, anywhere between 87 sqm to more than 100 sqm for the twobedrooms, and a choice of penthouses with up to five bedrooms, with interiors designed by LEO International Design Group Co., Ltd. 29


IN ASIA, THE INTERGENERATIONAL CONCEPT IS GENERALLY DELIVERED VIA A BIG HOUSE OR PLOTS OF HOUSES. THERE WAS A NEED, AND WE ARE FILLING THAT NEED WITH A PRODUCT NOT OFTEN FOUND IN MULTIUNIT RESIDENTIAL DEVELOPMENTS

MULBERRY GROVE SUKHUMVIT DIFFERENTIATES ITSELF FROM THE MARKET WITH A WIDE FRONTAGE DESIGN AND EXTRAORDINARY AMOUNTS OF GLAZING, ACHIEVED BY RADICALLY DEPARTING FROM THE ORTHODOX WAYS OF DESIGNING LIVING AND DINING SPACES IN CENTRAL BANGKOK

“In Asia, the intergenerational concept is generally delivered via a big house or plots of houses. There was a need, and we are filling that need with a product not often found in multi-unit residential developments. We designed this from scratch because there aren’t a lot of precedents for it. We created a new prototype or typology in high-rise, high-density, urban living that relates to the fundamental characteristic of the Thai household or any other Asian household,” says Brouwer. Roongrote affirms: “It’s really the reverse of what the market is doing. Everyone’s trying to squeeze the unit down, reducing the size, but we are doing the opposite.” Most units in Mulberry Grove Sukhumvit are connectable, linked through doors that allow different members of the family to bond with their loved ones or, as bedrooms are detached from each other and often separated by the unit’s common areas, enjoy private time as they please. Spaces are designed in deference to the mobility needs of the elderly and people with disability. Corridors are 1.8 metres wide, enough for two wheelchairs to run side by side. “Your parents can buy one unit, and you can buy another, and these can be connected in the future,” explains 30

ONE OF MULBERRY GROVE SUKHUMVIT’S STRONGEST VALUE PROPOSITIONS LIES IN A RANGE OF AMENITIES THAT ONE COULD NOT FIND IN LANDED RESIDENTIAL PRODUCTS, SUCH AS A PRIVATE SPA, PICTURED BELOW, AND OTHER WELLNESS AMENITIES FOR RESIDENTS OF ALL AGES

Roongrote. Although easily accessible from some of Bangkok’s most advanced hospitals, Mulberry Grove Sukhumvit will provide its residents with free, 24/7 access to a medical caregiver. “We were worried the elderly would prefer to live in big landed homes with gardens, but we’re bringing all the features and facilities that housing couldn’t have,” says Roongrote. Instead of creating narrow, deep living rooms, as architects are wont to do with high-density commissions, Brouwer’s team flipped such dimensions sideways, increasing the width of the frontage—up to 20 metres in the two-bedroom units. “It’s an act of generosity from the point of the developer to say, yes, I will go with that because it does cost more money. In doing so, I think we radically changed the experience of the living-dining experience,” says Brouwer. The design strategy highlights the floor-to-ceiling windows, which has uninterrupted views of the Chao Phraya River to the south and the frenetic Ekkamai and Thonglor neighbourhoods to the north. Despite Bangkok’s height regulations, Mulberry Grove Sukhumvit has been able to maximise its building envelope, elevating the first batch of units above surrounding low-rises. “We didn’t want to have units 31


OPPORTUNITIES FOR ACTIVE AGEING ABOUND IN MULBERRY GROVE SUKHUMVIT, WHICH CONTAINS A SKY-HIGH GYM STUDIO, ONE OF SEVERAL AMENITIES OVERSEEN BY AN APPOINTED WELLNESS MANAGER WHO CAN DISPENSE FITNESS ADVICE

start in the zone where their views are compromised. From the lowest unit all the way to the top, families can enjoy similar views at varying heights,” says Brouwer.

residents and guests can congregate on the rooftop’s social lifestyle suite, where, on the same floor, the residents’ lounge offers complimentary afternoon tea sips to the tune of a grand piano.

Liberated balcony spaces allow architects to innovate with The Nook: a multi-purpose room in the unit that can either be closed or opened to the outdoors. The elderly can even use it to build a fishpond. “It went through quite a few iterations. We tested it with the client and the design team. It’s a bit like a hybrid vehicle,” says Brouwer, likening the space to winter gardens.

“We’re not saying we’re replacing the city, but it’s a much more diversified environment within which to spend more time. We’d like people to go out but there’s also a lot to enjoy onsite,” says Brouwer.

The ground floor of the development hosts three distinct zones of amenities, including coworking spaces and a nursery area. The mid-tower area is home to wellness and physical activity venues, including swimming and hydrotherapy pools, a gym, massage room, spa, and more, minded by a designated wellness manager. Some 130 metres above ground, 32

MQDC was adamant the designers not make the building “too flashy”, lest they put off older property seekers. The building form eschews the smooth, steel-and-glass boxes typical of late-20th century towers and opts for a volume broken into different massing, with vertical fins on the façade and a palette of bronzes, beiges, and browns. “It looks like multiple towers clustered together. We drew inspiration from the art deco period, albeit with a sense of embellishment. Horizontally, it is

GREEN SPACES AT MULBERRY GROVE SUKHUMVIT ARE AS FUNCTIONAL AS THEY ARE AESTHETICALLY PLEASING. THE GOURMET COURTYARD, FOR INSTANCE, LETS FAMILIES PLANT HERBS AND VEGETABLES TOGETHER. THEIR LOCATION IS ALSO WELL THOUGHTOUT; A GARDEN WITH A TREEHOUSE WOULD BE SET RIGHT NEXT TO THE EXERCISE AREA, FOR EXAMPLE, TO BRIDGE THE GAP BETWEEN GENERATIONS

distinguished between the ground, which has a solid, stone-like quality versus the superstructure, which is more glass and aluminium,” explains Brouwer. From the landscaped driveway and the lobby to the penthouse, the journey through the building will be akin to a “six-star experience,” he adds.

THE DIFFERENT POOLS AVAILABLE AT MULBERRY GROVE SUKHUMVIT – SUCH AS THE INFINITY SKY POOL, HYDROTHERAPY POOL, THERMAL POOL, AND CHILDREN’S POOL – REFLECT THE AMENITIES’ APPEAL TO RESIDENTS OF ALL AGE GROUPS

Construction will commence as early as the fourth quarter of 2020, with completion scheduled for 2023. A sales gallery opened in February before the pandemic closed it down. However, transactions have since resumed and “exceeded” the developer’s expectations, Roongrote claims. One visitor to the gallery left an impression on him. “We had a grandmother who came to the gallery, who used a stick to point at each of the project’s functions. And she said, ‘I really like it.’ We’re taking that as a good sign since a lot of purchase decisions are still made by the elderly,” he concludes. 33


Chips off the old block Armed with progressive design principles and a ferocious work ethic, twins Gil and Gary Coscolluela are proving worthy successors to their trailblazing father BY BILL BREDESEN

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T In university a lot of our mentors knew the family name. It was a double-edged sword: it did well for us in a lot of ways, but there were high expectations being the sons of a prominent architect

AS A PRACTICE W.V. COSCOLLUELA & ASSOCIATES IS CONSTANTLY EVOLVING, WITH NEW PROJECTS INCLUDING THE INNOVATION AND CREATIVE HUB FOR THE ATENEO DE MANILA UNIVERSITY

o drive around Metro Manila’s central business district of Makati is to bear witness, in large part, to the architectural legacy of the Coscolluela family, which has been leaving its imprint on the city’s skyline for more than six decades. The family patriarch, Willy, founded W.V. Coscolluela & Associates in 1957, and the firm’s hundreds of projects over the years have included landmark office, residential and commercial buildings, along with museums, country clubs, resorts, and more, both in the Philippine capital and beyond.

Did you always know you were going to follow in your father’s footsteps and become architects?

Among the firm’s many recognisable and enduring creations are RCBC Plaza, the Ayala Twin Towers, and SM City North Edsa— the country’s largest shopping mall when it opened in 1985.

Gil: When I was younger, I thought I might go into business because I saw how complicated architecture could be—and business seemed like the fastest way to make money. But then I started spending time in the office in the summers, and I really grew to appreciate the design and development aspects of architecture.

In recent years, the firm has helped usher in the green architecture movement in the Philippines through its work on the LEEDcertified, 33-storey Zuellig Building in Makati, commissioned by the Swiss pharmaceutical company with deep manufacturing roots in the country.

Gary: The same goes for me. Somehow in the beginning architecture wasn’t on my mind. But our exposure to the field led us both this way. Also, having seen our dad work so hard—I knew he needed help. He wanted one of his family members to take up that mantle.

Today, Gil and Gary Coscolluela—Willy’s twin sons—stand at the helm of the business alongside their father, who, in his mid-80s, remains actively involved. Gil and Gary were made senior architects in 2013 and have since furthered Willy’s vision through their involvement in some of its most important new projects.

What’s the greatest lesson you’ve learned from your father?

Being the scions of an industry leader has always meant a high bar, the brothers say.

Gary: Patience is another thing he’s especially good at. When you work with clients, you need to understand their needs and wants, and how you can marry your ideas with theirs. It can take a lot of patience, especially when you’re young and have ideas you want to push.

“In university a lot of our mentors knew the family name or they knew our father. Some teachers were classmates with him. It was a double-edged sword: it did well for us in a lot of ways, but there were high expectations being the sons of a prominent architect,” Gil says. Like business leaders everywhere in the age of the coronavirus pandemic, Gil and Gary are being forced to confront new challenges. Covid-19 cases in the Philippines have been steadily rising since July, but the firm continues to move forward, laying the groundwork for new projects in 2021. 36

“Things have slowed in the construction side of the business. We’ve had some projects put on hold, or deferred, to the first quarter of next year. But luckily for us we’re still ongoing with planning for other projects, which is good. We have a lot of time for planning until the end of the year,” Gil says.

Gil: For me, it’s him saying, “Never compromise your principles. If you believe in something and stand for something, then stick to it.” And he always says: “Time is gold. Don’t waste your time.”

How would you characterise your design aesthetic? Gil: Our dad is not an aesthetic designer, and that’s trickled down to us in the sense that we like to plan things from the inside out. We adhere to the idea that form follows function. Maybe that’s old-fashioned, but it works; it’s efficient and it gets the job done. What’s reflected inside is reflected outside. 37


Are there types of projects you prefer from a creative standpoint? Gil: Personally, I don’t have a preference. I’ve been involved in office buildings, shopping malls, museums, and houses, and each has its own requirements in terms of how to go about it. The bigger key for me is finding the right client, one who understands your ideas and with whom you can communicate effectively and produce what needs to be produced. Gary: From a construction standpoint, it’s easier to build office spaces. In residential, there are many areas to consider, whereas an office is mainly just an open space. You put the proper provisions and the tenant can do what they need with the space. It’s easier in terms of construction. But design-wise, we do office and residential, and it’s all very educational. What recent project stands out as a particularly notable achievement? Gil: One that really stands out is the Zuellig Building in Makati, because it’s the first platinum-level LEED-accredited building in 38

the Philippines—not just the exterior, core, and shell, but the interiors as well. It has become the benchmark for a lot of office buildings coming up in the CBD area. For that project, the client was adamant they wanted an iconic building, an efficient one, and one that would go up to LEED Platinum. What are the challenges of getting underway on a project like that? Gary: The design brief at the beginning is always important. Having an open dialogue and a clear brief helps spell out the project’s intentions and goals. From there it just develops. A lot of people have different ideas, and that can be another challenge so it’s helpful to have a committee consolidate those ideas. Gil: The interaction between the designers and architects is key so that a more refined brief can be produced. That helps everyone know if something can be executed properly. What changes are you seeing in clients’ demands for so-called green architecture?

COSCOLLUELA FAMILY PATRIARCH WILLY AND SONS GIL AND GARY HAVE MADE A SIGNIFICANT CONTRIBUTION TO THE BUILT LANDSCAPE IN THE MAKATI AREA OF METRO MANILA

Gil: A lot of projects coming up want to be similar to the Zuellig Building. With a proper team and proper client, it can be achieved. Green architecture includes considerations like wellbeing, community impact, energy and carbon reduction, mobility, connectivity, and water usage. All of these amount to costs at the same time. When reality sets in, there will usually be some compromises. It really depends on the client and what their wants, needs, and directions are. What does “going green” do to a project’s costs? Gil: What seems to be hard for some clients to accept are the initial costs that come with it. That’s why we need to prove that in the long run, it’s beneficial to them to get into sustainable design as there are long-term cost savings. Gary: This is especially relevant today [with the coronavirus pandemic]—the environment is very important to people, whether it’s residential or office spaces. Over the years, costs in sustainable technology have come down a bit and should come down even more as we move forward. For

any development, we always put these on the table for clients. What’s happening in the sphere of urban development in the Philippines? Gary: The government has implemented guidelines for sustainable technologies, and there are new incentives to adopt these guidelines. Before there were no incentives and nothing much was being implemented— it was all on the developers’ shoulders. Makati is a dense, heavily populated area that needs more open spaces, so there are new incentives to achieve that. Things like pedestrian spaces are increasingly important.

THE ZUELLIG BUILDING IN MAKATI IS THE FIRST PLATINUMLEVEL LEEDACCREDITED BUILDING IN THE PHILIPPINES AND IS REGARDED BY MANY AS A BENCHMARK FOR FUTURE OFFICE DESIGN IN THE COUNTRY

What’s on the horizon for your firm? Gil: There are many big, exciting projects. We are working a lot with Foster + Partners. My brother is involved in a big project with them for the most expensive and tallest residential project in the CBD. At the same time, we’re working with them on another very big office building in the CBD. We feel lucky to be busy at this point.

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ver the past two decades, Indonesia has been in the midst of a building boom, as international businesses and tourists flock to the archipelago. The ever-popular island of Bali continues to welcome a succession of lavish resorts, each vying to somehow top its predecessors. Meanwhile, oncegritty Jakarta is increasingly becoming a regional commercial hub, with a skyline to match.

Up the function His firm PTI Architects may be behind some of Indonesia’s most striking designs, but Doddy Tjahjadi is mindful of prioritising substance as well as style BY DIANA HUBBELL

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Behind many of the nation’s most ambitious developments lies PTI Architects, established in 1991 as a a local member of the Peddle Thorp International Group. Although the firm’s reach is certainly global, its imprint is most clearly visible across its home nation, where it has been responsible for everything from schools and hospitals to towering office blocks and five-star resorts. Doddy Tjahjadi, managing director of PTI Architects, has personally witnessed the lasting impact that architecture and design can have on a rapidly developing economic powerhouse. “Part of what drew me to architecture even when I was in high school was the fact that it’s a field that affects so many people,” Tjahjadi says. “Architecture is the epitome of many cultures throughout human history. If you look back at the

legacies left by the ancient Romans, Greeks and Egyptians, much of what we remember them by are the buildings they left behind.” The opportunity to create something of lasting cultural value appealed to him, as well as the opportunity to help shape urban spaces in a positive manner. Subtle changes in urban planning can fundamentally alter the societies that they serve. “As our firm has grown, we have developed a deeper appreciation for the factors involved in our practice,” Tjahjadi says. “We have to incorporate social changes into architecture. We have to bring social values into urban planning, by making a concerted effort not to separate the rich from the poor. The more involved you are, the more the level of personal interest arises.” For many prominent architects, that interest manifests in the form of bombastic, unmistakable styles. Soaring starchitecture often feels like an attempt to stamp one’s personal brand on a city in glass, concrete and steel. Tjahjadi sees nothing wrong with creating striking buildings but tends toward a more modest approach.

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Architecture is the epitome of many cultures throughout human history. If you look back at the legacies left by the ancient Romans, Greeks and Egyptians, much of what we remember them by are the buildings they left behind

PTI ARCHITECTS IS RESPONSIBLE FOR LANDMARK PROJECTS AROUND INDONESIA AND FURTHER AFIELD. YET, DESPITE HIS FIRM’S HIGH PROFILE, PRINCIPAL DODDY TJAHJADI PREACHES A MODEST APPROACH TO HIS CRAFT

“Style comes second to usability,” Tjahjadi says. “We can’t just cater to our egos as architects. At the end of the day, we understand that our clients want something aesthetically pleasing and lasting, but at an economical budget. Our work has to provide a good return on investment both for the clients and for society at large.” PTI Architects’ pragmatism and versatility is part of why the firm has earned such a varied range of commissions over the years. While the Six Senses Uluwatu in Bali and the DoubleTree by Hilton Vientiane are both visually impressive, one would never assume at first glance that the two designs stem from the same firm. Instead, both designs feel especially suited to their specific environments. “Our Balinese resorts, for instance, adapt many elements of local Balinese design, while a hotel in Laos incorporates many elements of Laotian culture and history,” Tjahjadi says. “Function is the most important of the design process. Of course, there are a lot of things following that, like form, but I think the building needs to suit the purpose for which it is designed.” Nowadays, much of the consideration of function revolves around a building’s carbon footprint and overall environmental impact. For Tjahjadi, incorporating green building strategies such as passive ventilation and upcycled materials is a no-brainer, both from a moral and a financial perspective.

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“I believe that we have a responsibility to maintain our environment and to make each building as green as possible,” Tjahjadi says. “Over the course of the lifespan of a building, incorporating green design will offer a great many benefits to everyone—the society, the country, and the world. Right now, I think every architect should be taking a green approach. What differentiates firms from one another is how far they are willing to go with it.” When it comes to luxury hospitality in Southeast Asia, many of the leading brands are willing to push the envelope as far as possible. According to Tjahjadi, many of the hotels and resorts the firm has designed throughout the region are certified LEED Gold or Platinum. “All these things will affect the cost of running the building. Hoteliers understand that impacts the final revenue because it’s less costly to run and, in the end, offers a better value for money,” he says. “Both Six Senses and Banyan Tree really gravitate towards using green materials, construction methods, and design.” With its emphasis on corporate responsibility and sustainability, PTI Architects is leading the way for the generation building Indonesia’s future.

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Six Senses Uluwatu “Six Senses really bring their love of sustainability to each project,” Tjahjadi says. In the case of this resort with 75 stunning clifftop villas, as well as 28 sky suites and penthouses, almost all of the materials are local and renewable, and all of the potable water is reused and purified onsite. “Crossventilation is built into all of the villas, each of which has an ocean view. This allows guests to feel comfortable with or without the use of air-conditioning.” PTI Architects looks forward to continuing to work with Six Senses. “We’ve learned a lot by working with these leaders in sustainability, because they constantly ask if every detail is green enough.”

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Alpha HQ What sets this award-winning, ultra-modern office tower in Jakarta apart is the double-layered glass that wraps the facade. In a tropical climate, a traditional glass-encased office block acts like a greenhouse, requiring enormous amounts of fossil fuels to maintain a bearable internal temperature. This innovative design, however, allows for lots of light with far less heat. “That means when the sunlight hits the building, the heat is largely trapped between the two layers of glass, so you don’t feel it with such intensity,” Tjahjadi says. “It also allows fewer UV rays into your internal space. Even on a hot day outside, it’s much cooler inside. Also, there can be a lot of noise outside, but you don’t really hear it inside.”

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PIK Avenue This multi-use development, which now hosts two major international hotel brands and a shopping centre, is a prime example of how essential details can be. When PTI Architects arrived, the initial plans had already been laid. Unfortunately, they included a number of decidedly inefficient decisions. “Many of the main facilities were initially designed facing west, which is something you try to avoid in a tropical country, because it means that the buildings get a lot of additional heat from sunlight,” Tjahjadi says. “The client asked us to look into solutions and after that, they threw all of the design out and we had to start from scratch. All that work paid off, though, because it’s become one of the famous retail projects in Jakarta.”

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The Park Solo While western nations have long enjoyed leisurely outdoor shopping areas, the concept of hosting retail space out of a climate-controlled environment is relatively novel across Southeast Asia. “Previously, most of the malls in Asia and Indonesia are really indoors, because outdoor is so hot,” Tjahjadi says. “This is designed in such a way that there is a natural flow of air and ample shade, which means that the entire mall is not dependent on airconditioning. The most important element is that you must have crossventilation in the outdoor areas. Because we’re living in a tropical climate which is very humid, the natural breeze helps maintain a comfortable space.”

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Banyan Tree Bali “When it comes to villa design, Banyan Tree, for me, is the guru. They really have a sense of how to get that ‘wow effect’ when it comes to villas,” Tjahjadi says of this plush five-star with villas overlooking a sheer cliff. “They know this because they are one of the leading hotel brands and they have feedback from customers all over the world. Banyan Tree was designed 10 years before Six Senses Uluwatu and it’s interesting to see how the trends have shifted in Bali in luxury tourism over that time. Design is changing and our understanding of luxury is changing. Items like mobile phones were luxury items 15 years ago. Now they’re in everyone’s pockets. It’s the same with hotels.” 52

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DoubleTree by Hilton Vientiane Located on the site of a former news agency in the Laotian capital, this boutique hotel is steeped in history. Rather than opt for a generic, modern aesthetic, Tjahjadi wanted to highlight the space’s distinctive past and imbue it with a sense of place. “The interiors reflect a lot about Lao tradition and culture,” Tjahjadi says. “That’s why we integrated a lot of the history of the news agency and the old printing machines into the hotel. We are both the architects and the interior designers. It will become one of the most modern hotels in the country, but if you step inside it, you know that you are in Laos.”

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That’s snowbiz BY LIAM ARAN BARNES

The liveliest of Niseko’s four ski villages, Hirafu is hooking buyers due to its world-class lifestyle options, year-round outdoor pursuits, and second-home investment opportunities

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For centuries, Hokkaido was an isolated Narnia of myths and whispers. Even today, Japan’s northernmost island, though accounting for one-fifth of the whole country, is home to a mere 5% of its population. It remains a largely unspoiled, enigmatic landscape where emerald summers quietly ease into piercing-white winter months. And then there’s Niseko. Nestled in the foothills of the eponymous mountain range, this melting pot of high-octane activity and après-ski went from “undiscovered” to Asia’s undisputed premier ski resort in little over a decade. At its heart is Hirafu, the largest and liveliest of Niseko’s four ski villages. With its abundance of year-round lifestyle options, including world-class restaurants, retail outlets, and outdoor pursuits, in addition to top-tier secondhome investment opportunities, it’s little wonder that Hirafu’s popularity has yet to peak.

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HakuVilla 588

Intuition Niseko

Toshiro’s Bar

Yukichichibu Onsen

Rhythm Base

Kamimura

HakuVilla 588 is that rare example of a residence that justifies its hyperbolic marketing material. The seven-storey property, which basks in vistas of nearby Mount Yōtei, features just four 300-plussquare-metre units. The four-bedroom, five-bathroom properties all have a private onsen and are staffed by a discrete team of hosts, chauffeurs, and chefs. Located in the Upper Hirafu Village only 200 metres from the Hirafu gondola, residents have direct access to the village’s premier amenities. Onsite facilities include a private wine cellar, golf simulator, and karaoke room, as well as one of the neighbourhood’s favourite eateries, Haku Steak Restaurant, on the ground floor.

Opening its second phase this winter, Intuition Niseko is another upscale property reaping the rewards of Hirafu’s stunning scenery. Building on the success of the 10—sold-out—villas in phase one, the latest instalment features 32 fully furnished serviced apartments, ranging from studios to six-bedroom penthouses. The luxury onsen estate, designed by Tokyo-based architect ALA Inc. to subtly integrate into the surrounding birch forest, sits in the centre of Hirafu, moments from ski lifts and shopping and dining destinations. While the exclusive onsite onsen is the drawcard, residents also benefit from concierge services, in-house dining options, and upscale fitness facilities.

Some would argue that après-ski is the real reason holidaymakers hit the slopes each season—and given the lively vibes inside Toshiro’s on any given winter’s night, it would be difficult to disagree. Since launching in 2014, this snug sanctuary in Niseko Prince Hotel Hirafutei has blossomed into a firm post-piste favourite. Patrons are often warmly welcomed by the bar’s husband-and-wife team who serve up some of the village’s most creative cocktail concoctions alongside revered Japanese whiskies and local craft beers. With only 30 seats, early arrival is advised, especially during peak season, to snag a seat and drink to the day’s adventures.

Hirafu is home to a smattering of small onsens, mainly located in hotels, but for an authentic affair, those in the know head 30 minutes out of town to Yukichichibu Onsen. It’s famed for its sulphur-rich spring, Hokkaido’s only volcanic mud pool in the female section, and relatively laidback attitude (translation: they serve beer). The panoramic views of Oyunuma thermal lake and Mount Chisenupuri that surround the 11-rotenburo onsen only add to the sense of seclusion and relaxation. The historical outdoor onsen, open since 1966, recently underwent an extensive refurbishment, adding contemporary components to this classic experience.

This recent addition to Hirafu’s retail mix is a one-stop destination for upscale ski apparel and community-centric activities. With more than 1,200 square metres of floor space, expect to find gear from the world’s most iconic winter sports brands for purchase and hire. It also houses an equipment tuning workshop and events space that frequently showcases local films, art exhibitions, and live music. The brand’s own award-winning caffeine fixes, meanwhile, are served up at Rhythm Beans Coffee on the ground floor, while the inhouse bar is a great place to trade tales from the slopes.

For a Hokkaido native who honed his craft in the kitchen of Sydney’s most celebrated Japanese restaurant, Tetsuya’s, Chef Kamimura raised a few eyebrows when he unveiled his French-inspired eatery in Hirafu more than a decade ago. Although Niseko’s only Michelin-starred restaurant is unashamedly Gallic, its dishes are a poignant celebration of the island’s finest produce and ingredients. Each stage of Kamimura’s nine-course degustation menu takes patrons on a Franco-flecked culinary journey through northern Japan’s diverse landscape, from Notsuke scallop sashimi to Kamimura’s innovative take on (Wagyu) steak-frites and roasted Yoichi apple served with Hokkaido ice cream. For a more casual affair, check out Kamimura’s latest creation, Kitchen.

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HOME AWAY FROM HOME Geographical proximity, solid profitability and a transparent real estate market have all contributed to Australia’s soaring popularity with Asian developers and investors. But with the pandemic sowing discord, this cosy symbiosis faces challenges BY LIAM ARAN BARNES

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ne of Donald Horne’s most pervasive observations in his iconic polemic of 1960s Australia “The Lucky Country” was that it might have been the “world’s most suburban nation”. More than half a century on, his swipe at the conservative, white picket fence culture of the time has taken on a far more literal meaning.

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With more than 50% of the population now living in Australia’s three largest cities, Melbourne, Sydney and Brisbane can’t stop growing. Since the turn of the 21st century, the east coast housing boom has drastically contributed towards the construction of more than 700,000 apartments, according to the Australian Bureau of Statistics. An increase in birth rates, longer life expectancy, and urban migration (90% of the population now live in cities) are driving the unprecedented housing demand. But it is not just the local market fuelling this 20-year construction frenzy. In 2012, the government introduced the Significant Investor Visa (SIV) programme, allowing foreign high-net-worth individuals to invest at least A$5m in the country in exchange for permanent residency under the Business Innovation and Investment Visa programme. And although the country had traditionally been a popular destination for migrants and second-home buyers from Europe, the US, and Canada, it was the big spenders from Asia who answered the investment siren. “Australia has always been an open, transparent, and friendly market for offshore investors,” says Benson Zhou, director of Asia Markets at Savills Australia. “But Asian overseas buyers, in particular, benefit from proximity to the continent, some of the world’s most comprehensive property laws, and net yields that are between 4% and 7% higher per annum than in most Asian countries.” Investment from mainland China, Hong Kong, Singapore, South Korea, and Japan far surpassed demand from the west in the last decade. Buyers from China have been particularly prolific, purchasing $113.2 billion worth of Australian property, accounting for 19.3% of all foreign asset purchases, according to data released this year by Australian Foreign Investment Review Board (FIRB). But it is not only Chinese individuals that have capitalised on Australia’s fertile business environment. Over the past five years, mainland Chinese developers have significantly ramped up their presence, building landmark residential towers along the skylines of the east coast. Approximately 20% of Sydney residential development site 60

sales in 2019 were purchased by offshore developers, while in Melbourne they made up a 44% share, according to Michelle Ciesielski, head of Australia residential research at Knight Frank. “When offshore developers commenced their inaugural project in Australia, many had a strategy to sell to buyers familiar with their brand first and then build up their brand locally,” she says. “But with FIRB restrictions in place, many could only sell a small portion of their project to offshore buyers. This, in addition to the market undersupply witnessed a few years ago, means that nowadays they are more familiar with local Australian buyers.” An assortment of big-name Southeast Asia developers are also in on the action, especially in the east coast’s hotspots. Notable projects include one of the country’s most expensive residential properties, SP Setia’s Sapphire

ADDING TO THE MELTING POT In 2018, Australia’s population hit the 25-million mark. Although this seems a fairly insignificant figure to a citizen of one of the world’s major metropolises, it represents a major milestone for a nation, which only two decades ago, was home to just 18 million people. It’s impossible to know for certain who the 25-millionth person was, but author and political commentator George Megalogenis believes it was most likely a young, female Chinese student or skilled worker. “The two biggest migrant groups in Australia are Chinese and Indians since the turn of the 21st century,” he says. “So, we’re getting an extraordinary number of Chinese and Indians from two countries that are actually rising.” Divided by visa category, international students are the largest group of arrivals, and China is the most common country of origin for international students in Australia, while the majority are male, Megalogenis adds.

Asian overseas buyers benefit from proximity to the continent, some of the world’s most comprehensive property laws, and net yields that are between 4% and 7% higher per annum than in most Asian countries

BUYERS FROM MAINLAND CHINA HAVE BEEN PROLIFIC IN AUSTRALIA, SNAPPING UP $113.2 BILLION WORTH OF PROPERTY AND ACCOUNTING FOR 19.3% OF ALL FOREIGN ASSET PURCHASES

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by the Gardens in Melbourne, Sydney-based One Central Park by Singapore’s Frasers Property, and the sprawling Eden’s Crossing community on the outskirts of Brisbane, a joint venture backed by Thai development behemoth Supalai. Australia’s eastern cities are by far the most popular and most lucrative investment destination for Asian buyers. “More than 60% of all SIVs granted since 2010 have been for investments in Victoria, while New South Wales accounts for about one-third, with buyers hailing primarily from China, Hong Kong, and Malaysia,” says Ciesielski. Data released in 2019 by online property portal Domain Group also shows Sydney, Melbourne and Brisbane experiencing a median increase of 68%, 54% and 22% respectively during the period.

EASTERN CITIES SUCH AS MELBOURNE ARE BY FAR THE MOST POPULAR AND MOST LUCRATIVE INVESTMENT DESTINATION FOR ASIAN BUYERS

Although record-low interest rates, strong population growth, and land scarcity in the prime coastal markets are the main factors, a common refrain remains in Australia that foreign, mainly Chinese, buyers are responsible for these price hikes. Foreign spending, however, has little effect on the existing housing stock due to restrictions on overseas investment. Analysts believe such purchases rarely account for more than a percentage point or two of the almost 500,000 annual home sales in recent years. Overseas investment is, in fact, perceived a positive influence on the market. “The current rules around foreign investment in residential property aim to direct investment into new housing, increasing

the housing supply and supporting local economic activity,” says Ciesielski. “This means local buyers are not competing with offshore buyers for an established product.” Investment levels from China reportedly peaked in 2018, but only 12 months later had abruptly fallen by more than 50% to A$6bn, ranking it only the fifth largest source country for real estate investment behind Singapore and Hong Kong. “This can be attributed to a range of factors such as China’s internal domestic policy settings, including increased scrutiny of outbound investment and stricter capital controls,” writes FIRB chairman David Irvine in its annual 2020 report, noting other local factors include the introduction of foreign investment application fees, the doubling of

stamp duty in Victoria and New South Wales, and tighter lending conditions. Canberra and Beijing’s extended honeymoon seem to be cooling off. Data released by one of China’s largest online property portals Juwai shows enquiries fell by more than 65% in May. While some dampening can inevitably be attributed to the pandemic, the nosedive coincides with Canberra’s decision to investigate the origins of the virus. The move drew an immediate rebuke from China and the threat of trade sanctions, including suggestions its citizens avoid Australia due to racist threats. Far from being a paranoid and overzealous accusation by China’s ruling party, there has reportedly been a sustained increase in anti-Chinese, and more broadly anti-

AN EDUCATED INVESTMENT If more evidence was needed of just how significant—and lucrative—Australia’s student accommodation market has become, investors need look no further than Scape Australia’s acquisition last October of the Atira Student Living Platform. Backed by Allianz Real Estate and AXA Investment Managers-Real Assets, the A$700m deal made Scape the largest student accommodation provider in the country. “Investors are hunting for scale in an increasingly tight market. Five years ago,, you wouldn’t have found it in student housing,” says Noral Wild, Head of Alternative Investments, JLL. “How times have changed.” The acquisition includes three development properties, in Melbourne, Perth and Sydney. The group has now deployed A$1.2bn of capital in the sector, with 2,600 units currently in operation and another 8,000 under construction.

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THE QUEENSLAND CAPITAL BRISBANE, WITH ITS SUBTROPICAL CLIMATE, IS ANOTHER FAVOURITE WITH ASIAN INVESTORS

ASIAN DEVELOPERS ARE MAKING THEIR MARK ON AUSTRALIA’S MAIN CITIES WITH NOTABLE PROJECTS INCLUDING ONE CENTRAL PARK IN SYDNEY BY SINGAPORE’S FRASERS PROPERTY

Asian, racial abuse and harassment since Covid-19 hit Australia in February. A survey released earlier this month by independent think tank Per Capita, the Asian Australian Alliance, and Being Asian Australian, revealed 386 reports of racist incidents between April and June, from verbal and written abuse to physical intimidation and assaults.

while China is the country’s top source of international university students. “Current tensions with China, whilst of concern, will pass,” surmises Scott Keck, chairman of property advisory firm Charter Keck Cramer. “There is an overriding, economic imperative to maintain bilateral trade and a neutral, respectful relationship.”

Another poll by the Sydney-based Lowy Institute in June showed 94% of Australians want Canberra to identify other markets to reduce its economic dependence on China, while a similar survey in April and June across 10 Chinese cities found most respondents were “not optimistic” or “uncertain” about improving Sino-Australian relations.

With international students enrolled in Higher Education in Australia now accounting for around a third of its total students, according to a 2019 Savills report, investment in the Australian student accommodation market have reached record levels in 2019, highlighting a significant shift in maturity and emergence of the sector into the mainstream investor spotlight. While the category is currently under pressure as many students have not yet returned due to travel restrictions, there is a general view the segment will survive and normalise return in the near future.

Real estate experts and economists—in Australia, at least—almost unanimously agree the two countries will make up. China is after all Australia’s largest trading partner, accounting for about 36% of its exports. Australia, meanwhile, is home to more than 700,000 Chinese-born migrants, according to the Australian Bureau of Statistics, 64

“Globally, Asian students prefer to come to Australia over Europe and the US due to its proximity, standard of living,

and quality of education,” says Keck. “It is this fundamental attraction that Australia offers that should be the underlying assurance.” The government’s announcement of a new visa scheme, offering post-graduates an additional year in Australia, was expected to further boost the Asian student population. But with lockdowns in most states expected to continue into 2021, it could be some time before short- and long-term overseas migration reaches pre-Covid levels. Prime minister Scott Morrison said recently that he expected net overseas migration to drop 85% from 2018 levels in the next financial year. Experts, meanwhile, believe this could result in a fall in housing demand of about 80,000 units. The pending glut is already impacting house prices along the east coast. Knight Frank recorded a 30.7% decrease in nationwide apartment sales to 19,725 in the first quarter. Property data company CoreLogic, meanwhile, reported in August that all the major east coast markets suffered,

most notably Melbourne, which experienced a 3.5% decline between April and July. “Structurally, there has been an enormous demand shock to the Melbourne property market with the closure of international borders, where Melbourne previously had the highest level of net overseas migration of the capital city markets,” says CoreLogic’s head of Asia Pacific research Tim Lawless. If Morrison’s bleak outlook is accurate and migration figures slump drastically over the next 24 months, it could finally bring the curtain down on the breakneck rise of the east coast’s skylines over the last two decades. The cooling of the resale market, meanwhile, should provide some cut-price deals to local buyers who have managed to avoid the Covidinduced economic downturn. The question remains whether Asia’s moneyed investors and students will continue to pour into Australia if the lockdown and diplomatic tensions drag on into 2021—and how the real estate industry will adapt if they do not return. 65


BLOODIED BUT UNBOWED Competing factors ranging from political instability to ill-fated reforms may have adversely affected property markets. But the various nations of South Asia all have cause for cautious optimism as the post-pandemic world moves into view BY LIAM ARAN BARNES

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INDIA’S BOOM YEARS UNDER PRIME MINISTER NARENDRA MODI APPEAR TO BE OVER WITH ATTEMPTS TO FORMALISE THE ECONOMY AND REGULATE THE REAL ESTATE INDUSTRY RUNNING INTO PROBLEMS

With the festival months in full swing—typically the most active time of the year for property investment— and with India’s relatively good management of the pandemic instilling confidence, a cautious sense of optimism is emerging the sector further was when industry behemoth IL&FS defaulted on debt, forcing the government to intervene in a move labelled India’s “Lehman moment”. “Investor participation in the market had already been practically wiped out, causing a massive mismatch of supply and demand,” says Amit Khanna, CEO of asset management company InterGlobe Real Estate Ventures. “With NBFC borrowing obliterated from the market, real estate players were left with no option but to rely on equity to complete projects, rendering most unviable.” India’s GDP growth had already slowed to an 11-year low in 2019-20 when government enforced one of the most stringent Covid-19-induced lockdown measures globally. The IMF in June forecasted a 4.5% drop in 2021—the economy’s first contraction in 40 years. Property was inevitably hit hard: Knight Frank India’s H1 2020 report notes residential sales across the top eight property markets plummeted 54% year-on-year in the first six months to 59,538 transactions.

India The Palais Royale in Mumbai’s waterfront Worli district was supposed to be India’s most exclusive address. The skyhigh retreat for the nation’s elite, with its six-figure units, multiple swimming pools, cinema, and a cricket pitch, symbolised India’s boom times. A decade on, however, the unfinished 320-metre high project has become an eyesore—an omnipresent reminder that India’s real estate woes came long before the 2020 pandemic hit. The culprit: a move towards demonetisation led by prime minister Narendra Modi in November 2016. 68

Rocking the property sector, Modi’s failed attempt at formalising the economy decapitated construction and sales, with some developers defaulting on large-scale projects. This was followed by the Real Estate Regulation and Development Act (RERA) and the Goods and Services Tax (GST). The former may have provided a much-needed regulatory body, but by restricting movement of finances between projects—coupled with the 11% GST on underconstruction projects—RERA caused serious cashflow

issues and soaring project costs for developers. The biggest blow to the industry was the 2018 non-banking financial company (NBFC) crisis when the Reserve Bank of India clamped down on loans to developers from traditional financial institutions, leading to the rise of shadow banks. These NBFCs, including Palais Royale’s financier Indiabulls Housing Finance, soon became the largest source of funding for property developers. Crippling

But there are silver linings for India, post-pandemic. For such a vast market, Indian real estate remains notoriously un-digitalised, but with diminishing transactions and almost no site visits since the lockdown started, property firms have been embracing proptech. Some online property firms like Square Yards, which went fully digital in April 2020, reportedly recorded an uptick in transactions. “We used present market conditions to push our digital solutions for the sector, along with structured products with India’s largest developers,” says CEO and founder Tanuj Shori. “We launched a digital platform that 69


DEMONETISATION, DESIGNED TO BE A GIANT STEP TOWARDS MODERNISATION, LED INSTEAD TOWARDS CHAOS AND MAYHEM WITH MEMBERS OF THE PUBLIC LEFT CONFUSED BY THE MOVE

THE REAL ESTATE EXPLOSION IN SRI LANKA HAS SLOWED IN RECENT TIMES, BUT OBSERVERS ARE OPTIMISTIC THAT THE SECTOR IS SHOWING SOME SIGNS OF LIFE

Sri Lanka automates the complete property transaction value chain—from pre-sales, with online virtual tours and 3D walkthroughs, through to a post-sales module for submission of online applications with digital signatures.” Companies implementing work-from-home policies is another game-changer. If the teleworking culture persists post-pandemic, the office space market will be forced to adapt. “We are seeing many companies either reducing their space requirements or relocating to more spaced-out office layouts,” says Ajai A Kapoor, founder of real estate service company 360 Degrees, adding that developers now incorporate home offices into apartment layouts and promote onsite meeting rooms as among the amenities within larger projects. With the festival months in full swing—typically the most active time of the year for property investment— and with India’s relatively good management of the pandemic instilling confidence, a cautious sense of optimism is emerging. Even Palais Royale, which after a decade of financial and building violation allegations, is under new ownership and could finally open next year. In a tumultuous era, much can go wrong. But, given the portents, it currently looks like India’s property market may have weathered yet another storm.

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A CLEARER PICTURE The raft of regulations introduced by Modi’s government may have paused most sectors within the property industry, but for homeowners and institutional investors, it has heralded an era of transparency. Global property services firm JLL’s latest transparency report places India 34th on the global index, up from 142 in 2014. In addition to the implementation of critical structural reforms like RERA 2016 and GST, the main driver is the strengthening of its real estate investment trust (REIT) framework and active role of organisations like the Indian Green Building Council and Green Rating for Integrated Habitat Assessment. Elsewhere, emerging markets have once again shown the most significant advancement, with six Asia Pacific markets—mainland China (32nd), Thailand (33rd), India (34th), Indonesia (40th), Philippines (44th) and Vietnam (56th)—amongst the top 10 most improved globally.

When travel tastemaker Lonely Planet named Sri Lanka 2019’s top country in the world to visit, it seemed the pint-sized island nation’s time in the sun had finally arrived. After a decade of reflection and reconstruction, following more than 25 years of brutal civil war, the country was not only on the bucket list of travellers but property investors, too. A slew of developers surfed the post-war economic wave and, off the back of burgeoning tourism, bet big on an influx of overseas investment into the luxury residential market. But the bright outlook soon faded. A constitutional crisis in October 2018 staggered the economy, while the Easter Sunday bombings in Colombo, which killed 250 people, brought the nation to a complete standstill. The country quietly retreated, tourism ebbed, and the projected real estate investment never arrived. The terrorist attack was an all too familiar reminder of the fractures within Sri Lankan society—fractures the Sri Lanka Podujana Peramuna party, the controversial yet popular Rajapaksa clan’s latest political vehicle, manipulated and politicised in the run-up to the

November presidential election that Gotabaya Rajapaksa subsequently won. The previous Wickremasinghe administration was not without its faults. Deemed dysfunctional and unpopular amongst the business community, it failed to maintain the pro-investment environment of previous years and effectively implement anti-corruption measures—the platform on which it rode to power in 2015. “There was a collective sigh of relief from the business community after the November election,” says Roshan Madawela, founder of Research Intelligence Unit (Sri Lanka). “It signalled a clear way forward for macroeconomic policy.” Indeed, prior to the Covid-19 outbreak, the segment was welcoming some green shoots largely due to the introduction of favourable investment policies by the new administration. These included the reduction of 15% VAT on condominiums to 6% and tax exemption for apartments below LKR25m. The high-end market also recorded absorption rates of about 50% at the start of 2020, which “even in the face of recent adversity was encouraging by regional standards,” says Madawela.

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THE RAJAPAKSA FAMILY WITH MAHINDA (PICTURED) AS PRIME MINISTER AND HIS BROTHER GOTABAYA AS PRESIDENT HAS CEMENTED ITS FIRM HOLD ON THE LEVERS OF POWER IN SRI LANKA FOLLOWING THE COUNTRY’S RECENT GENERAL ELECTION

If Covid continues to be managed and tourism returns, Sri Lanka will emerge as a very attractive proposition despite the multifarious economic challenges that the government will have to face

OUT OF OFFICE REPLY The pandemic has upended working life, changing how and where people do their jobs. While many offices are slowly reopening, albeit with rigid social distancing and hygiene measures, some companies are embracing the benefits of employees working remotely. Still, the knock-on effects of Covid-19 on the property market are inescapable. Although Sri Lanka has responded effectively to the pandemic—recording only 11 deaths as of press time—developers and constructions companies struggle with rising costs, cash flow, and significant delays to launches and handovers. Some are even offering discounted rates of around 5% to expedite transactions and reinforce cash flows, reports Nirmal De Silva, co-founder and CEO of Paramount Realty. One project that has continued apace throughout the pandemic, however, is the Chinese-funded $1.4bn Port City Colombo. Set to house an estimated 80,000 residents, in addition to a financial district, hospitals, 72

hotels, and even a theme park, the 665-acre megadevelopment will “ramp up” under the Sri Lanka Podujana Peramuna regime. De Silva believes it will ignite interest from foreign investors, not just from China, but India and Europe, too. Stronger incentives, however, are necessary for overseas investment to really take hold. “One of the factors behind oversupply in the top-tier market was the lack of enticement for foreign investment,” says De Silva. “But the government is now proposing a five-year residence visa for investments, which will definitely drive demand over the next few years, as well as the anticipated reduction in interest rates.”

In the meantime, analysts agree it will take at least 12 months for the market to regain any momentum. But with the Rajapaksa family recently consolidating its grip on power in August’s parliamentary election and their effective handling of the pandemic, it looks like the optimism of 2018 is slowly returning. “If Covid continues to be managed and tourism returns, Sri Lanka will emerge as a very attractive proposition despite the multifarious economic challenges that the government will have to face,” forecasts Madawela.

A survey conducted in August by Lanka Property Web suggests that about 73% of businesses in the country are looking to downsize office space in response to the pandemic. At least half stated they would continue to have staff work out of the office, particularly those from sectors such as information technology, research and development, and consultancy. Although the results do not necessarily spell the end of the traditional office market, it demonstrates the need for commercial real estate developers to adapt to post-Covid workspace demands. 73


ALTHOUGH ITS CAPITAL DHAKA IS NOT KNOWN FOR ITS LIVEABILITY, BANGLADESH HAS A FAST-GROWING ECONOMY AND A SYMPATICO CLIMATE FOR FDI WORKING IN ITS FAVOUR

Soneva Jani in the Noonu Atoll, which start from $3m, and ownership schemes at Banyan Tree Vabbinfaru. More affordable condominium options exist in the country’s capital, Malé, but the market remains relatively nascent, according to Nirmal De Silva, co-founder and CEO of Paramount Realty. “Due to its popularity as a high-end tourism destination, there has always been a belief that there will be an increase in demand for residential units,” he says. “But there’s no proper structure to allow the inflow of foreign investment, so developers continue to focus on the local market. “I can’t see this changing in the next few years.”

Pakistan 2020 was supposed to be the year that Pakistan’s property market brushed itself down and blossomed after years in the doldrums. Buoyed by a boom in inbound tourism in 2019, an improving business environment demonstrated by a 30-place leap in World Bank’s Doing Business 2020 ranking, and rising demand for high-end properties in the key markets of Lahore, Faisalabad, Multan and Karachi, hope was on the horizon for the country’s real estate industry prior to the Covid-19 outbreak. Unlike regional counterparts India and Sri Lanka, however, Pakistan’s response to the pandemic has been sluggish. As such, the economy is expected to shrink by $15bn in 2020, with the real estate sector expected to suffer more than most.

Bangladesh Few would disagree with the Economist Intelligence Unit’s decision to name Syria’s war-torn capital Damascus the world’s least liveable city in 2019. Only two spots above, however, sits Dhaka. The Bangladesh capital is one of the world’s most densely populated cities, with a population of more than 20 million, and regularly records some of the worst air pollution on the planet. There are—to the uninitiated, at least—few redeeming features. Yet Bangladesh remains second only to Bhutan as South Asia’s fastest-growing economy, recording average GDP growth of 6.5% in the past decade, according to the World 74

The Maldives Bank. It also offers one of the most liberal foreign direct investment regimes in the region. Contradictions and extremes such as these also define Dhaka’s residential market. The northern neighbourhoods of Gulshan, Banani and Baridhara, known as the “green zone”, are home to new residential developments that would not look out of place in Singapore, while the central district of Dhanmondi is more culturally vibrant, with art galleries and international restaurants. In these prime districts, properties cost as much as $3m, according to local agency Gemcom.

There has been much talk during the pandemic of escaping to isolation destinations, boltholes far removed from the soul-crushing news cycles of 2020. The reality of the modern world, however, means such locations are increasingly rare to come by—unless a private island is within budget. Those with shorter pockets, meanwhile, could turn to the Maldives as a remote alternative.

A sharp decline in remittances from the country’s diaspora has also hit the market hard this year. According to Mohammad Hassan Bakhshi, former chairman of the Association of Builders and Developers, overseas Pakistanis on average invested $10 billion in the property market in recent years. But with the economic downturn expected to continue long into 2021 and ongoing issues surrounding banking transaction regulations and excessive property transfer taxes unlikely to be resolved soon, there are concerns that the diaspora may choose to invest elsewhere in the future.

Home to more than 1,000 desert islands and 980 kilometres from the nearest landmass, the Indian Ocean archipelago offers a limited number of leasehold options for homeowners. These include full-service villas at 75


ALL THAT GLITTERS ISN’T GOLD

Sluggish sales of upscale projects and blowback from the pandemic are forcing a shift in Myanmar’s real estate sector, with developers forced to better tailor product to the demands of the market BY AL GERARD DE LA CRUZ

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ith the world going through a period of unprecedented turmoil, it can be tempting to assume that things are uniformly grim. Some countries, however, have avoided (thus far) the worst impacts of the pandemic. One of these is Myanmar, poised to post a GDP growth this year of 4.2%, the second fastest in Southeast Asia after Vietnam, according to the ADB. Myanmar is far from immune from the virus though. In June, the IMF doled out $356m in emergency funds to the country, on the heels of findings it would post a bleaker GDP growth of 1.8% by year’s end. And, if anything, the virus has further eroded the primacy of its upper-tier residential real estate sector. “Even prior to the pandemic, the market hasn’t been in a good shape. Myanmar is simply not ready for many of the condominiums and properties we call upscale developments,” says Karlo Pobre, managing director of Colliers Myanmar. Condominium sales prices went down by as much as 30% in the first quarter of the year, equal parts due to the outbreak and a bloated supply, which ballooned 5.7% quarterly to 13,060 units, the consultancy reports. Sales take-up rates have decelerated over the past three years to as low as 40%, with many projects at the mercy of default buyers. “What the pandemic has done is make it even worse,” points out Pobre.

BANKING ON INFRASTRUCTURE

The Covid-19 situation is a blessing in disguise because it’s making developers realise the products they’re offering are not really suited to this market

THE FORMERLY LOW-RISE SKYLINE OF YANGON HAS BEEN BOLSTERED BY MODERN CONDOMINIUM, HOTEL AND OFFICE-BUILDING PROJECTS. DEMAND, HOWEVER, HAS FAILED TO KEEP PACE WITH SUPPLY

Naypyidaw has earned plaudits for formulating the Myanmar Sustainable Development Plan, an umbrella framework guiding national progress until 2030. It has also reaped praise for developing the Myanmar Project Bank, an open, interactive web-based platform that highlights new investment projects seen to further said framework. “There are some large-scale infrastructure and real estate projects that should be a strong driver of growth if the investment can be found to take those forward,” notes Richard Emerson, managing director of the advisory firm Emerson Real Estate. One of the largest projects under implementation is the upgrading of the 46-kilometre Yangon Circular Railway Line, due for completion in 2022. The $245-million project, financed by a loan from the Japan International Cooperation Agency (JICA), will run on 63 new diesel electric multiple unit carriages, improving punctuality of the trains and reducing travel time around multiple townships of Yangon to 110 minutes. “Some of these stations are, in fact, greenfield sites, so you can create nodes of transport-oriented developments, and that will still make you connected to other potential future business centres in Yangon,” says Karlo Pobre, managing director of Colliers Myanmar. JICA is also funding the $323-million construction of a bridge over Bago River, connecting Yangon and Thanlyin Township. It will facilitate transport of goods between the Bago Industrial Zone and the Thilawa special economic zone (SEZ).

Expatriate tenants and buyers, especially from Europe, have all but fled Myanmar, and the few sticking around are contending with the convoluted legalese of foreign ownership and dearth of suitable financing, according to Richard Emerson, managing director of the advisory firm Emerson Real Estate. “Currently, the residential market is essentially a local market as far as foreigners still cannot legally purchase projects due to the delay in the Condominium Law implementation,” he says. Pending the finalisation of provisions in the Law, some foreigners have been reduced to illegally acquiring units under nominee arrangements with local partners or inking convertible contracts with developers, i.e. those that convert to a legal contract as soon as the law is ratified. Meanwhile, Chinese and South Korean developers have been strengthening marketing efforts in their home countries, ensuring a fount of property seekers for their joint ventures in Myanmar. Shuttered sales galleries throughout Myanmar have led developers to extend their marketing tendrils online. “If you’re not digital, it will be almost impossible to sell a property [in Myanmar],” says Justin Sway, CEO of real estate portal ShweProperty. 78

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GETTING IN THE ZONES To picture the pace of industrialisation in Myanmar, one only needs to look at some of the 29 mostly state-owned industrial zones strewn across Yangon: many of which are in fairly dilapidated condition with unpaved roads. In addition, Myanmar industry is still limited to light to medium manufacturing, such as textiles as well as food processing and packaging. “The longer-term view is for having medium to heavy manufacturing or having capabilities for some assemblage or heavy processing here in Myanmar,” says Karlo Pobre, managing director of Colliers Myanmar. The Thilawa special economic zone (SEZ) has been an outlier in that it has really set the standard for industrial real estate development in the country. The SEZ, built by a Myanmar-Japanese consortium on a build-operate-transfer (BOT) agreement, has inspired industrial developers such as Amata from Thailand and Sembcorp from Singapore to invest in recent years in the country. “These are hopefully really of internationalquality development, basing it on their own portfolio from other projects outside Myanmar. These will definitely upgrade the level of industrial zones or industrial estates,” notes Pobre.

Although online platforms have been enormously helpful in moving the needle on sales during the pandemic-induced recession, analysts argue that the right strategy has less to do with marketing than acknowledging certain market fundamentals. “The issue here is that pricing is really expensive. It’s as simple as that,” says Pobre. The pandemic is exposing the lopsided nature of Myanmar’s residential stock, largely skewed toward condominiums at exorbitant price points that hover at around $300,000 on average.

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“It’s a far cry from what many of the population could afford,” says Pobre. “Although there is a meagre percentage of capable buyers who can acquire properties at $400,000 and above, the sweet spot is less than $100,000—perhaps even at the $30,000 to $50,000 or $70,000 range—but there’s only about 3% to 5% of that being offered in this market,” says Pobre.

A NUMBER OF LARGE-SCALE INFRASTRUCTURE PROJECTS ARE SET TO DRIVE GROWTH IN MYANMAR. ONE OF THESE IS THE UPGRADING OF YANGON’S FAMOUS CIRCULAR RAILWAY WHICH LINKS TOWNSHIPS AROUND THE SPRAWLING HUB

“You build an enabling environment for industrial manufacturers and distributors, and that will spark everything. From industrial, you can build distribution, you can build retail, and have your own outlets. And then that could also result into having low-income earners being more capable of buying low-income properties.”

Not that developers have much choice—land prices in Myanmar have been legendarily exorbitant, hitting a record $14,000 per square metre in 2013 and leading to a glut in developments beyond the means of the majority. Myanmar

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THE 2020 PANDEMIC HAS HIT RETAIL BADLY, BUT WITH MYANMAR UNDERSTOCKED WITH CONTEMPORARY SHOPPING SPACES, THERE REMAINS A GAP IN THE MARKET FOR LIFESTYLE DESTINATIONS SUCH AS JUNCTION CITY IN YANGON

Large-scale Asian investments are pouring into the nation’s industrial and economic zones, mixed-use sites, and integrated townships. Major regional developers—including Japan’s Kajima, Thailand’s Amata, and Malaysia’s Berjaya— have all announced high-profile projects in the first quarter of 2020. “In a market where the financing of property projects might be slightly more complicated for the next year or two, given the pandemic and reduced risk appetite, we expect a need for local developers to engage with foreign developers and investors, creating joint venture opportunities,” observes Emerson. Around $895m worth of FDI flowed into the country’s real estate sector in the first seven months of FY 2019-2020, followed by the manufacturing sector with $544m, official figures show. This is four times more than the previous fiscal year’s FDI in real estate, notes Emerson. The FDI coming into real estate only ranked second to that pouring into the power sector, which received over $1bn during the same time. This fills a gaping void in Myanmar. “Electricity remains a major hindrance for many foreign investors to set up here in terms of manufacturing. Myanmar still has very low power and electricity capacity—it’s one thing that has to be addressed going forward if they want to really move on to the next stage,” observes Pobre. Like most pandemic-ravaged economies, Myanmar currently operates in a low-interest environment, with rates now down to 7%—a very “positive move” and sure-fire catalyst for cheaper bank financing, says Emerson. “It’s amazing how, in recent six weeks, there has been much interest from local Myanmar buyers looking to acquire property on the back of interest rates now being significantly lower than they were before,” he says.

people like landbanking, causing plot prices to rise to a point where they become non-viable or non-financially feasible sites as developers will end up introducing luxury projects, according to Pobre. With land prices gradually coming down from their eyewatering peaks, developers have taken to introducing simpler apartments or condominiums fetching prices of $30,000 to $40,000, in contrast to 2016 when as much as 80% of market offerings would be upscale—a clear mismatch. “There is some sort of silver lining here. The Covid-19 situation is, to me, a blessing in disguise because it’s making developers realise the products they’re offering are not really suited to this market,” adds Pobre. Over the last four years, Myanmar citizens have invested almost MMK2.6tn ($1.9bn) in real estate, state figures show. “One thing definitely very clear is the huge demand for 82

modern affordable housing in Myanmar. This really hasn’t been tapped into yet, and there are massive opportunities for international and local developers to create products at the right price point to satisfy market demands,” says Emerson. Although many western investors have turned tail and exited—an ongoing process for several years now due to the country’s twisty and divisive internal politics—Asian countries have been funnelling hefty amounts of capital into Myanmar real estate, led by Singapore, China and Thailand, according to the latest data from DICA. “Myanmar is an Asian investment at this point. Of course, if you unlock growth for western investments, that would be good. But having the Japanese, Koreans, and Chinese seem to be boding well for the country’s growth,” says Pobre.

The government has also rolled out stimulus measures under the Covid-19 Economic Relief Plan (CERP). Authorities have offered tax deferrals and credits, while SMEs and critically affected businesses have been made eligible for loans and other credit facilities. The government has also delayed requirements for banks to meet capital adequacy requirements, enabling them to be more flexible with existing barriers in terms of loan repayments. “We hope the government will recognise that the real estate industry is a major driver of economic growth. It should be part of their recovery plan. When there is a catastrophe like Covid-19 in the market, one of the first things governments will do is look to create infrastructure and real estate projects,” advises Emerson.

DROP AT THE SHOPS Retail landlords have been suffering from shortterm rental losses owing to the pandemic. The rental rate in Yangon stood at just USD25.6 per sqm per month on average in the second quarter of the year, a decline of 10% and 16% quarterly and annually, Colliers Myanmar reports. Most of the adjustments in rental rates occurred in older shopping malls, supermarkets, and department stores. Before the pandemic, occupancy rates for Yangon’s retail stock had been hovering around 90 percent. In Q2 2020, the average occupancy rate inched down to 88%, a quarterly decline of 1.3%. The next six months could witness a further decrease of 10% to 15% in occupancy. “Retail activities have yet to reach to the prepandemic levels as at the end of Q2 2020. In fact, the impact of this pandemic is far from over and it may be months before this ongoing socioeconomic disruption fully abates,” states Hpone Mint Thu, research manager for Colliers Myanmar. “Further decline in consumer expenditure may be inevitable and that, in turn, may pose challenges especially for fashion and lifestyle tenants in the short to medium term,” he warns. A combination of harsh weather and paucity of public recreational facilities will always bring footfall to retail spaces in the long term. Myanmar is still short on retail spaces and most formats are modestly sized, dominated by supermarkets and community retail centres. “Myanmar doesn’t have enough shopping malls. If you look at retail per capita in Bangkok, you would have 13 square metres for every one person. In Yangon, you have one square metre for every 13 people,” says Karlo Pobre, managing director of Colliers Myanmar. “Yangon still needs to have lifestyle retail destinations. However, there are some challenges to that, given the sizable land plots that you would require to build this type of development,” he adds.

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The Chinese government has been fighting a battle against rising prices, which has proven difficult to manage in recent years, let alone win. Of the 10 worldwide cities with the most expensive housing prices, three of the top six are in China Even Wuhan, ground zero of the Covid-19 outbreak, recorded a near 8% surge in prices over the same period, notes MacDonald. While cities like Fuzhou, Wuxi and Changzhou have fared worse, official data reveals overall prices in China’s housing market climbed at their fastest pace in 10 months in June.

Crisis? What crisis? A stunning rebound in China’s residential market has confounded predictions of a difficult year. But the surprise surge has reignited fears of imminent overheat By Steve Finch

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iolent protests in Hong Kong, the worst pandemic in a century, and an escalating trade war with the United States have barely registered a dent in Shenzhen’s robust housing market. The city of 12 million people—considered a Covid-19 success story in China for its aggressive contact tracing—saw sales all but cease entirely for two months early this year. But once normal sales activity resumed in mid-March, a wave of pent-up demand ensued with transactions surging 41% in the city during the first half compared to the same period in 2019. Resale home prices also recorded a sharp 14.3% rise, according to official government data.

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RESIDENTIAL MARKETS HAVE REBOUNDED IN CITIES ACROSS CHINA, WITH SHENZHEN AMONG THOSE RECORDING A SURGE IN TRANSACTIONS IN RECENT MONTHS

Residential markets in the country’s main cities have fared particularly well, recording figures unthinkable just a few months ago when many analysts predicted a tough year for Chinese property. Shanghai, the only city with higher average prices than Shenzhen, saw transaction volumes reach a three-year high and prices climb nearly 5% during the first six months of 2020. “It’s surprising how quickly the market rebounded,” says James MacDonald, head of Savills Research in mainland China. “Shanghai and Shenzhen have performed well over the past six months, but not only these cities,” he adds, citing strong price growth in the northern city of Tangshan and Chengdu in the southwest, among others.

During this period of unprecedented economic damage—China’s economic output contracted 6.8% during the first quarter and rebounded to 3.2% growth from April to June—financial stimulus proved key to China’s real estate recovery miracle. By June, mortgage rates had fallen below 5.3%, according to loan platform Rong360, their lowest in nearly three years following three rapid-fire rate cuts by the central bank in the wake of the pandemic. “[The] main stimulus is the interest rates,” says Regina Yang, head of research at Knight Frank in Shanghai. However, by the start of the second half of the year, signs emerged of growing government concern that residential prices had in many cities already become overheated amid the surge of easy money. In mid-July, China’s Banking and Insurance Regulatory Commission complained black market lending was seeping into the stock and property markets. Two weeks later, Han Zheng, seventh in command in China’s Politburo, held a rare real estate meeting in Beijing urging stricter monitoring of the housing market, warning of the inflow of unlicensed loans into the market. Among the attendees were officials from Shenzhen and Shanghai—the cities leading the recent housing rally. “Han is signalling a ramp up of regulatory action in H2 to keep the real estate market

(and real estate prices) in check,” says a note by Trivium, a China policy research consultancy based in Beijing. The Chinese government has been fighting a battle against rising prices, which has proven difficult to manage in recent years, let alone win. Of the 10 worldwide cities with the most expensive housing prices, three of the top six—Shanghai, Shenzhen, and Beijing—are in China, according to CBRE’s annual global living report published in August. First-placed Hong Kong and Vancouver in seventh point to how far and wide Chinese buyers have travelled to secure their money in property amid a continued lack of safer or more profitable asset options on the mainland. Next year’s survey will almost certainly show the picture further skewed towards China: the data used by CBRE is from 2019, and since then Shenzhen prices have skyrocketed while many cities have stagnated amid Covid-19. Government efforts to rein in China’s housing market point to the uneven challenges facing this huge country and its hybrid market system during normal times, let alone a pandemic. In Shanghai, prices have surged so far this year but in lesserknown Jinan, just three hours north by highspeed train, the housing market has deflated since the pandemic. China’s policy efforts remain a mixture of broad central government instruction and interpretation at the local level. To show they are listening, city governments have increasingly made sure to begin announcements on real estate policy by quoting a now infamous warning by President Xi Jinping from October 2017: “Houses are for living, not for speculation.”

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Dispatch

Dispatch Shenzhen’s municipal government began issuing a raft of additional purchase restrictions in mid-July. Would-be buyers would only be allowed to complete on a property if they could show a residency permit for Shenzhen and proof of income tax or social security for the previous three years. Families would be restricted to owning two homes in the city, and singles just one. With many buyers frozen out of the market overnight, market activity immediately dropped: after reaching 10,000-unit sales in June, a four-year high, transactions roughly halved in Shenzhen in the week following the new restrictions. Some cities have punished major lenders in a bid to rein in rapidly resurgent market activity, particularly those where prices have risen sharply. In Ningbo, a branch of Bank of China was fined in July after “allowing personal credit funds to flow into the housing market,” and in nearby Hangzhou, Agricultural Bank of China was penalised for doing similar.

EVEN WUHAN, GROUND ZERO OF THE 2020 PANDEMIC, HAS SEEN LIFE RETURNING TO ITS REAL ESTATE MARKET FOLLOWING LONG MONTHS OF LOCKDOWN

Although officials in Beijing and at the local level have continued to warn of market speculation, many analysts agree such activity has remained minimal since the pandemic, as pent-up demand and buyers keen to buy at prices lower than usual are viewed to be the key drivers. “China’s M1 [money supply], tier-one cities property inflation and home loan percentage of new lending [are] showing little signs of widespread property speculation,” according to BOCOM International’s chief analyst Hao Hong. The central government is now expected to refrain from further rate cuts over the remainder of the year in a bid to slow rising house prices while relying on individual cities to continue aggressive policy restrictions where necessary. Post-pandemic stimulus will therefore be aimed away from real estate, Nomura had stated in a July note: “Historically, stimulus in the property sector played a central role during easing cycles, but this time Beijing seems unlikely to risk another housing bubble in large cities.”

Bad Moon rising South Korea’s recently re-elected government is reeling as soaring property values make foreign buyer restrictions and property taxes inevitable By Steve Finch

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n April, when the ruling Democratic Party in South Korea swept regional elections on the back of widespread praise for its handling of the Covid-19 pandemic, President Moon Jae-in’s approval ratings soared to 70%. Four months later, that figure has dropped to less than 44%—a dramatic slide most observers attribute to one overriding factor: failure to rein in skyrocketing house prices. Although the South Korean economy was left reeling by the pandemic, house prices

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SOUTH KOREA’S PRESIDENT MOON JAE-IN HAS SEEN HIS APPROVAL RATING SLIDE BY MORE THAN 25% SINCE HIS GOVERNMENT WAS RE-ELECTED IN APRIL

in Seoul climbed 6.2% during the first five months of the year, fuelled by rates slashed by 75 basis points, making mortgages cheaper in a country traditionally beset by borrowing restrictions. “Whilst this was clearly necessary and is effective monetary policy, the impact of record-low interest rates has been that borrowing is cheaper, which has only caused Seoul residential prices to soar,” says Robert Wilkinson, managing director of Colliers International in South Korea. “Frankly, it is a

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Dispatch

The average price of apartments in Seoul has climbed 54.7% since Moon took office in 2017 despite 23 rounds of price combating measures—and counting—in just over three years tricky situation and there is not much that the Bank of Korea can do.” Central bank governor Lee Ju-Yeol has said helping the coronavirus-hit economy supersedes property price concerns. Critics, however, note that house prices have risen faster under Moon than during any other South Korean administration in recent history, thereby undermining the president’s leftist credentials. The average price of apartments in Seoul has climbed 54.7% since Moon took office in 2017 despite 23 rounds of price combating measures—and counting— in just over three years. Boom-and-bust economic cycles have played a part: Moon inherited a buoyant economy spurred by South Korea’s hosting of the Winter Olympics in early 2018, followed by a once-in-a-century pandemic. By contrast, his predecessor Lee Myung-bak, who oversaw rare negative growth in South Korean house prices, took office seven months before the collapse of Lehman Brothers. A key difference now versus then is that South Korea has gained precedence as a destination for international buyers. In 2017, when Moon took office, South Korea’s economy lost an estimated $6.8bn amid a Chinese economic boycott over the deployment of the American THAAD missile system, a gambit targeting North Korea that also angered Beijing over claims its radar could reach into northeastern China. Ideologically, it was then considered unpatriotic for Chinese to buy anything South Korean, including real estate. The following year, Moon used the Winter Olympics in Pyeongchang to stage a diplomatic charm offensive towards North Korea, leading to the most significant cooling

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of relations in Northeast Asia in years. The South edged closer to the North, and in turn both built bridges with Beijing. Suddenly Chinese tourists and home buyers flocked to South Korea, sending foreign house purchases soaring nearly 25% in 2018, of which 60% were attributed to the Chinese. In the first five months of 2020, overseas house purchases further jumped to 27%, according to the Korea Appraisal Board, and in June foreign transactions climbed above 2,000—a first in a calendar month. Rather than dampen foreign appetite for South Korean property, Covid-19 has spurred inquiries, according to Georg Chmiel, executive chairman of Juwai IQI, the largest online platform for Chinese homebuyers overseas. “Chinese demand for Korean properties spiked in Q1, when the coronavirus looked like it might just be a Chinese phenomenon,” says Chmiel. “Buyers were looking for overseas investments and safe havens.” While the median price for Chinese enquiries is $310,000 in other countries, in South Korea the price jumps to a staggering $2.142mn, according to Juwai IQI data. It’s a sign of just how inflated the South Korean market has become—and the growing willingness among Chinese to match those high prices. Amid a flurry of headlines over soaring foreign purchases, recent months have seen South Koreans “struggling to afford their own homes” call for curbs on such activity. The government appears to be listening: a number of lawmakers from the ruling Democratic Party have proposed a bill taxing foreign buyers up to 20% should they fail to take up residence in the property within six months.

Given Moon’s party occupies more than half of seats in parliament after April’s landslide election win, the bill is almost certain to pass, surmises JoAnn Jieun Hong, a director at Savills in Seoul. “Koreans who keep failing to buy houses in Seoul welcome policies to put heavy taxes on owners with more than two houses,” says Jieun. The government faces a difficult balancing act with property taxes: homeowners in South Korea have been complaining they are paying too much, and the country has only recently become a destination for foreign buyers. Property taxes reached $22.7bn last year, equivalent to 1.5% of nominal GDP—the highest in the developed world, according to the National Assembly Budget Office. In the US, by contrast, property taxes equate to just 0.1% of GDP. In an attempt to ease supply, the Ministry of Land announced plans to build new homes in Seoul’s greenbelt in July, but in just five days reversed the decision amid heavy criticism. Two weeks later, the government instead said it would build new homes by converting military and government zones to residential, and increase height limits on construction

ROCKETING PRICES IN CITIES SUCH AS SEOUL HAVE MADE IT DIFFICULT FOR DOMESTIC BUYERS TO GET A FOOTHOLD ON THE PROPERTY LADDER

from 35 to 50 storeys. That same week, Moon described house prices as the country’s “most pressing issue”. Moon is zeroing in on housing speculation, starting with his own administration. To make a point that everyone should be treated equally, the government called on its own members to sell off second homes, which has only drawn attention to wealthy officials and generated yet more criticism. By mid-August, three of Moon’s aides had quit and more had threatened to do so. Not even the Finance Minister Hong Nam-ki has spared himself, although he did still hold his job following his own public admission. “As a cabinet member, I’m deeply ashamed of myself in front of fellow citizens, and my acquaintances, amid controversy over multiple homes owned by public servants,” Hong stated in a hastily written post on Facebook in early July. All this contrition is all very well, but how forgiving the public will be of Moon’s government in the long-term remains a burning question.

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MAJOR THOROUGHFARES IN MELBOURNE SUCH AS COLLINS STREET, IN THIS PHOTO FROM AUGUST 2020, ARE DESERTED AS THE CITY IMPLEMENTS STAGE 4 RESTRICTIONS AGAINST COMMUNITY TRANSMISSION OF COVID-19. FILEDIMAGE/SHUTTERSTOCK

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