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Asia's 6 biggest construction projects of 2017

For the world's most expensive infrastructure and transport developments, look no further

A construction site in the Beijing Central Business District. Sean K/Shutterstock


Some of the highest-value construction projects in the world for this year are all located in Asia, as per the Arcadis International Construction Costs 2017. Construction markets in the region are expected to see an expansion of 5 to 7 percent a year, despite easing growth rate over the past 18 months.

Despite the exorbitant cost of the region’s biggest projects, they are all worth it in the end. Last year, the built environment contributed to USD36 trillion of the global GDP.

Count down to the biggest, highest-value construction projects in Asia this year:

6. Chengdu Tianfu International Airport

Construction works in Chengdu, Sichuan Province, China. LP2 Studio/Shutterstock[/caption]
China will increase the number of civil airports to 260 within three years. One of the more high-profile air complexes will be the Tianfu International Airport in Chengdu, which will receive a USD11-billion outlay. It will be the first airport in the country to have decentralised terminals. Up to 90 million passengers and two million tons of cargo are expected to pass through the air hub every year by 2045.

5. Beijing Daxing International Airport

Construction at Beijing Central Business District in April 2016. testing/Shutterstock[/caption]
Of the 130-plus airports cropping up across mainland China, the Beijing Daxing International Airport is the biggest yet. It will serve as a replacement of the Beijing Nanyuan Airport, and is on track for a 2019 opening. With a construction value of USD13 billion, Daxing Airport is expected to handle at least 80 million passengers every year.

4. Jeddah Economic City

A view of Jeddah Corniche at the edge of the Red Sea, Jeddah, Saudi Arabia. drpyan/Shutterstock[/caption]
The project formerly known as Kingdom City is a USD20-billion construction behemoth of homes, hotels, and office towers. This includes Jeddah Tower, set to be one of the world’s tallest structures upon completion. Jeddah Economic City will sprawl for two square miles.

More: What can Sri Lanka do to attract more foreign direct investment?

3. Dubai Al Maktoum Airport

Construction workers having a break in Dubai, United Arab Emirates. Rastislav Sedlak SK/Shutterstock[/caption]
Dubai pushes the envelope yet again in superlative construction projects with a USD33-billion investment on its the Al Maktoum International Airport. Set to relieve increasingly monstrous air traffic in the emirate, Al Maktoum is envisioned to become the world’s largest airport with an annual capacity of 220 million passengers and 16 million tons of cargo.

2. Delhi Mumbai Industrial Corridor

Golden hour over building construction in Noida, Delhi, India. Amlan Mathur/Shutterstock[/caption]
As its name suggests, this project covers a wide swath of the continent between the largest metropolises of India. Valued at USD90 billion, the corridor will encompass 24 industrial zones, across seven states and eight smart cities. Part and parcel of the project is the 1,500-kilometre long Western Dedicated Freight Corridor, set to be finished at the end of 2019.

1. One Belt, One Road

Construction site at Shanghai's Bund area. Captain Yeo/Shutterstock[/caption]
Taking inspiration from the Silk Route of yore, China is rabidly paving the path for its ambitious One Belt, One Road (OBOR) initiative. This is China’s biggest spending spree yet: a mammoth, 13-year investment in energy and transport infrastructure that spans Eurasia, Central Asia, Oceania, North Africa, and Southeast Asia. The program is two-pronged, focusing on landbased projects as well as maritime investments. OBOR, currently valued at USD150 billion, is widely regarded as China’s launchpad into a bigger role in global affairs.


Both the most expensive, cheapest cities in the world are in Asia

Manchester is now cheaper than Beijing and other interesting tidbits from EIU's latest living cost index

Dotonbori, a popular nightlife and entertainment area in Osaka, Japan.

Asian cities lorded over the Economist Intelligence Unit’s Worldwide Cost of Living report, out last week.

Names from the continent dominated both lists of the costliest and most affordable places to live in the world, per the report’s Cost of Living Index. Five of the world’s top six expensive cities are all in Asia, while cities in the Indian subcontinent make up half of the 10 least costly cities on earth.

Some traditionally expensive alpha cities have become more affordable of late. Due to the post-Brexit depreciation of the sterling, London is now only the 24th most expensive city in the world, while Manchester registered the biggest fall, from number 26 previously to a distant 51, making it cheaper than Beijing and tying it with Bangkok.

London is now a far greater lifestyle bargain than New York City, at ninth place, for the first time in 15 years, and Paris, at eighth place.

To arrive at the results, EIU tracked 400 individual prices across 160 products and services, including clothing, food, transport, home rents, utility bills, private schools, and recreation, in 133 cities around the world.

Asia’s priciest cities


5. Seoul

Streets of Gangnam in Seoul, Republic of Korea.

The South Korean megalopolis clobbered Geneva, Paris, New York, and Copenhagen, in that order, as the world’s sixth most expensive market. Merely topping up a grocery basket in the city is 50 percent more expensive than in New York, EIU reported.

4. Osaka

Light displays of Dontonbori in Namba, Osaka, Japan.

Rising costs in the city, as well as the next item on this list, can be attributed to the recovering strength of the Japanese yen. Osaka ranks fifth most expensive city in the world.

3. Tokyo

[caption id="attachment_62073" align="alignnone" width="740"] People crossing Ginza Road, one of the main luxury shopping areas in Tokyo. Jirat Teparaksa/Shutterstock[/caption]

With an index mark of 110, Japan’s largest metropolis is the fourth most expensive city to live in the world. Along with Seoul and Osaka, Tokyo is the priciest destination for purchasing staple goods.

2. Hong Kong

Star ferries in Victoria Harbour, Hong Kong.

More expensive than Zurich, the Chinese SAR comes in as the second most expensive city worldwide. Hong Kong fuel costs USD1.73 per litre, the priciest in the world and three times the price in New York, the report’s benchmark city.

1. Singapore

View of the Singapore skyline from the Marina Bay Sands' famous infinity pool.

The most expensive city on the world for four consecutive years, Singapore has 5 percent pricier living costs than nearest rival Hong Kong. It is the most expensive destination in the world to own a car, number two worldwide for clothing.

More: Asia’s 6 biggest construction projects of 2017

Asia’s least expensive cities


6. New Delhi

New Delhi's Indian Gate is the national monument of India.

The Indian capital is the 10th cheapest city in the world. Only Kiev, Ukraine and Bucharest are more affordable. “India is tipped for rapid expansion as Chinese growth declines, but much of this is driven by its demographic profile, and in per-head terms wage and spending growth will come from a low base,” EIU stated in its report.

5. Mumbai

Gothic building in downtown Mumbai.

The seventh least expensive city in the world happens to be the largest in India. However, it is a designation of disputed benefit, as “cheaper cities tend to be less liveable,” EIU warned.

4. Chennai

Foggy landscape of the city of Chennai with famous autorickshaw.

In fact, "there is a considerable element of risk in some of the world’s cheapest cities." Be that as it may, the world’s sixth cheapest city is the Tamil Nadu state capital.

3. Karachi

Blue hour over Karachi, Pakistan.

Pakistan’s largest city is the fourth cheapest city to live in the world, cheaper than Algiers, Algeria. It is the 130th most expensive city in the world, down from number 127 last year.

2. Bangalore

International Tech Park, Bangalore.

Only the recession-riddled Nigerian city of Lagos is more affordable than Bangalore, the third least expensive city in the world. "Although the Indian subcontinent remains structurally cheap, instability is becoming an increasingly prominent factor in lowering the relative cost of living of a location," EIU reported.

1. Almaty

Almaty is the most populous city in Kazakhstan.

Central Asia has the world’s pocket-friendliest destination: Almaty, Kazakhstan’s largest city. In Almaty, a kilo loaf of bread costs only USD0.90 while a bottle of table wine costs USD5.15.



India's attractiveness as a global investment destination strengthens

Private equity pouring in

 Mumbai's afluent Napean Sea area. Image: KishoreJ/Shutterstock

Galvanised by strong economic growth and resurgent sentiments of the country, around USD4.2 billion worth of newly raised capital, including debt and equity from global sources, in 2017, will enter the Indian real estate market.

“India’s attractiveness as a global investment destination has strengthened on account of the country’s political will to attract and protect investment growths,“ said Anshul Jain, managing director for India at Cushman & Wakefield. “India’s inclusion in the top investment destination is a testament of this confidence.”

Last year alone saw private equity investments in India reaching their highest in 9 years, Jain noted. The Indian real estate has attracted USD32 billion in private equity so far, the second-best showing ever for the country since a record in 2007.

More: Why Indian home buyers are taking developers to court

“Despite Brexit and uncertainty around the new US President’s outsourcing and visa-related policies, private equity activity also looks healthy in 2017 – thanks to a strengthening and modernising economy, and the growing reputation of India as an attractive investment destination,” said Ramesh Nair, CEO and country head for Jones Lang LaSalle India.

India ranked number 15 on a list of the top 10 target investment destinations in the world from Cushman & Wakefield’s The Great Wall of Money report.

The highly anticpated launch of REITs (Real Estate Investment Trusts) in the enxt few months is expected to further catalyse investment into Indian property. prominent private equity funds such as Blackstone will likely be the first movers into the first REIT listing in India.

"India's strong showing in the rankings is a result of continued policy moves to institutionalize real estate investments in the country with investors acquiring assets in anticipation of the introduction of REITs,” said Jain.


Shanghai usurps Tokyo as APAC's top property investment destination

Movers and shakers to descend on the region in an uncertain world

the bund and pudong

Pedestrians in the Bund, Shanghai. A. Aleksandravicius/Shutterstock[/caption]

Shanghai replaced Tokyo atop a new list of the top Asia-Pacific cities for real estate investment by Jones Lang LaSalle (JLL) this week.

The Japanese capital ceded its position to China’s largest city as the region’s strongest-performing real estate investment market in Q4 2016. Worldwide, Shanghai placed at number five, just behind New York, London, Los Angeles, and Paris.

Shanghai’s performance was put down to a steady stream of high-profile sales at the close of 2016. These include the biggest single-asset property transaction in Asia Pacific last year: the October acquisition of the Century Link complex by ARA Asset Management for USD2.91 billion.

"With political upheavals such as Brexit and the surprising U.S. election result, an increasing number of investors are looking at opportunities in Asia Pacific and specifically China," explained Joe Zhou, head of research, China, at JLL.

More: Why this historic Shanghai neighbourhood’s restoration is called ‘fake’

"Domestic capital was the main driver of real estate transaction volumes in 2016, with domestic investors often outbidding foreign investors in many transactions. We believe that China – particularly Tier 1 cities – remains attractive to foreign investors as the market matures."

China emerged as the biggest driver of real estate activity in Asia Pacific, with USD15.5 billion in transaction volume last quarter. South Korea and Japan followed with transaction volumes of USD7.4 billion and USD7.2 billion, respectively.

Real estate transaction volumes in the region rose 21 percent year-on-year last quarter.

"Continued appetite for real estate is expected to see investment volumes hold up, with core markets such as Sydney, Tokyo and Singapore attracting interest,” Megan Walters, head of research for Asia-Pacific at JLL, stated. "We expect stronger activity in Indian real estate, with investors likely to be interested in Southeast Asian countries such as Vietnam and the Philippines that are showing better prospects on rental growth."

Read next: Introducing Shanghai’s most exciting design duo

A scheme to make Malaysian homes more affordable may just do the opposite

Zero-entry-cost but ultimately expensive products are not the answer, experts say


A man painting an exterior wall of an old building in Ipoh, Malaysia. pixelbleed/Shutterstock[/caption]

An ambitious scheme by the government-run 1Malaysia Housing Programme or Perumahan Rakyat 1Malaysia (PR1MA) to widen access to credit for Malaysian home buyers has met dissent, Free Malaysia Today reported.

Rather than dismantle barriers to the housing ladder, the scheme, dubbed the Special PR1MA End Financing (SPEF), could sink borrowers further into debt. The annual compounded increase in the loan interest rates are projected to reach as high as 8.25 percent, said National House Buyers Association (HBA) secretary general Chang Kim Loong. “This could mean that the expected annual rate of increase in loan installments would be higher than the annual expected increase in salaries.

“We do not want a situation where there is a massive foreclosure of PR1MA properties because the owners cannot afford the revised loan installments.”

Introduced last week, SPEF entices Malaysians in the Bottom 40 and Middle 40 groups to take out a home loan with the prospect of repaying the principal, in increments, only after six years. In the first five years, borrowers need only service the loan interests.

More: Borneo steps up green game with new building requirements

Offering financing of as much as 110 percent to property value, SPEF attempts to reduce the likelihood of loan application rejections against first-time home buyers. Up to 60 percent of loan applicants with PR1MA last year were denied a loan or secured a lower principal than expected. PR1MA officials hope to reduce such dropout rates to around 20 percent.

Chang opined that affordability is the main wedge between Malaysians and their first home purchases; the products are inherently expensive. Lending schemes with “zero entry cost” miss the point, and PR1MA developers may simply inflate their offerings to cover any perceived shortfall in margins from SPEF. The scheme could also encourage speculative purchases rather than end use of the units.

The short-term panacea? Rent. “With the current economic slowdown, it is a tenant’s market, and prospective buyers can use this opportunity to find properties with attractive rental rates and start saving for their dream homes,” Chang said.

Read next: Why Malaysia’s market woes may soon be over

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