Irish property fund Investors in Asia (IIA) is switching its focus to Singapore and Hong Kong as government restrictions have limited the scope for operating in China.
The authorities there recently introduced legislation requiring property investors to buy through Chinese registered companies rather than individually.
The move was designed to take some of the steam out of the Chinese property market, which has been going through an unprecedented boom. IIA has invested €7 million in Chinese property on behalf of its Irish backers since it launched in late 2005. The company says that this has grown by 25 per cent.
Yesterday, it said that despite the government's move, Chinese property values were continuing to increase largely because domestic factors rather than foreign investors driving the growth.
"Beijing, Shanghai and Shenzhen are mature markets that are running on their own steam," the company said. "Irish investors who purchased property before the change in legislation can still expect appreciation in property and IIA will continue to manage their property from Beijing."
The company is planning to focus on the Singapore and Hong Kong markets in the immediate future. It said yesterday that these provide parallel economies to China, but have fewer restrictions.
It has hired Irishman Kenn Joyce, who has 20 years experience in property in the Asia Pacific region, to spearhead this move. IIA will initially concentrate on Singapore, whose economy grew by 8 per cent last year. Residential property was a key performer in the third quarter of this year, with over $2.8 billion (€2.2 billion) worth of property there sold to investors.
The company is expecting to attract over €11 million from investors for a Singapore apartment complex called the Vertis, which consists of 42 units. The properties are expected to deliver yields of 6 per cent and increase in value by over 12 per cent. Finance is available locally at 3.5 per cent a year and there are no capital gains tax charges in Singapore.
The directors of Investors In Asia Ltd are Andrew Paul, formerly of John Paul Construction, Patrick Parsons who is based in Beijing, and Paul O'Driscoll, also based in Beijing. He is the former managing director of Sino Link Property Company. Mr Joyce is the new director based in Singapore and Hong Kong.
