A CASE STUDY OF CAPITALAND LIMITED - ARE SINGAPORE PRIME RESIDENTIAL PROPERTIES BETTER INVESTMENTS?

Abstract

The Singapore property market is saturated with many players, major or minor. Coupled with the scarcity of land and the limitation of property development, overseas property investment and development become another way of diversification and of expanding the company's businesses. Overseas property development can be lucrative especially in cities that have huge potential. China is one of such an example. The attractiveness of the real estate market in China has many investors clamouring for a share of the pie. The yields are attractive and the real estate is blooming. Thus, China seems to outshine Singapore in terms of its attractiveness of the property market. This study sets out to examine whether Singapore prime residential projects are better investments than China prime residential projects. It uses CapitaLand Limited prime residential projects in Singapore and China as a case study. Using information such as yields, market conditions, newspaper reports and CapitaLand's annual reports, an analysis is made to determine the investment worth of the Group's local projects. It was found that the Group's Shanghai prime properties fared much better than its local prime properties in terms of take up rates and yield performance. However, this does not mean that its local projects are not good investment worth. In fact, CapitaLand should continue to expand its presence in the local market.