SINGAPORE - Media OutReach - 29 August 2018 - APAC Realty Limited todayannounced that it has entered into a joint venture agreement with Hainan ZhongZhi Sheng He Real Estate Investment Consulting Co., Ltd (海南中置盛和房地产投资顾问有限公司) andBei Guo Tou (Shanghai) Equity Investment and Fund Management Co., Ltd (北国投（上海）股权投资基金管理有限公司).
Thejoint venture, ERA Hainan Real Estate Marketing Co., Ltd (海南易安居房地产营销有限公司), will conduct brokerage and resale brokerage businesses,as well as establish training for and licensing of real estate agents inHainan. This agreement presents APAC Realty with an opportunity and keymilestone to penetrate the China market. This allows APAC Realty to have moreparticipation and control in the business with better profit margins throughits equity participation. The full range of real estate agency service issimilar to those offered in Singapore such as brokerage services covering new sales,resales and leasing in the residential and commercial sectors.
APACRealty and Zhong Zhi Sheng He Real Estate Investment Consulting Co., Ltd willeach own 40 per cent shareholding in ERA Hainan Real Estate Marketing Co.,Ltd., and Bei Guo Tou (Shanghai) Equity Investment and Fund Management Co., Ltdwill own the remaining 20 per cent. The registered share capital of the jointventure is RMB 20 million, approximately SGD 4 million.
As partof the joint venture agreement, all existing project-sale businesses from ZhongZhi Sheng He Real Estate Investment will be transferred to the new jointventure. Established since 2015, Zhong Zhi Sheng He Real Estate Investment hasbeen in the business of real estate consultancy and marketing services, withabout 50 employees currently. It has acted as a consultant for and/or successfullymarketed these projects:
Movingforward, the company has also secured the rights to market upcoming projectsuch as:
1. 富力湾 Phase 2 by R&FProperties
2. 碧桂园珊瑚宫殿 by Country Garden
3. 雅居乐清水湾 by Agile Group
4. 国家海岸保利海棠湾 by Poly Real Estate
5. 万科湖畔度假公园 by Vanke
6. 万宁日月湾旅游度假区 by Sunac
BeiGuo Tou Equity Investment and Fund Management Co., Ltd is a private companyincorporated in the People's Republic of China in 2013. It specialises inequity investment and asset management; investment advisory; businessconsultancy; and management services. Its registered share capital is RMB 40million. Currently, the company is also the shareholder of Clear Water BayInternational Information Industrial Park, a high-tech industrial park approvedby the Hainan Provincial Government. With four industry positioning - cloudcomputing platforms and next-generation Internet-based service outsourcing,smart Internet, cloud services and digital content, the golden ecologicalcoastline industrial park is dedicated to building a world-leading,domestically-initiated multi-urbanization technology city.
About Hainan's real estate market
Known asChina's Hawaii, Hainan's real estate market has been promising and robust inthe recent years. According to the Hainan Provincial Bureau of Statistics,property prices have doubled in the past 10 years, and were USD$1,543 per sqmetre in 2016. The prices continue to rise and are now doubled.
Accordingto the latest measures, those who wish to buy units in Hainan must provide proof of at least one familymember paying taxes or social security for 60 months there. In the central mountainous region,non-local buyers are unable to purchase any property. Non-Hainan residents aiming to buy homesin any other part of the province must provide proof of at least one familymember paying taxes or social security for at least 24 months in Hainan.
"Thetransactions might be affected in the near term. However, we believe the recentmeasures will help ensure a sustainable transaction volume and price appreciationin light of the government's plan to establish a free trade zone in Hainan by2020, which will see more international and regional investments in theprovince's economy," Jack Chua, Chief Executive Officer of APAC Realtyexplained.
Empowering sales agentsto become business owners
Inaddition to the new joint venture set up in Hainan, APAC Realty has also announcedentrepreneurship opportunities for ERA's agents to further advance their careersand be business owners in other cities of China. They can apply to open afranchise office in any Chinese city, and run a company with the support andguidance from ERA management.
SeniorGroup Division Director Daniel Phua was the first to pilot test this concept.He began a franchise office in Nanning, Guangxi, in May 2018 called 广西南宁德里房地产咨询有限公司 under the ERA brand. Despite this being anew venture, clients engaged them as ERA is a well-established organisationwith over 2,200 offices globally. The company has been successful in providinginvestors with a one-stop solution: brokerage and after sales services such asintroducing renovation contacts and property management. Hence, APAC Realty is excitedto extend this opportunity to all ERA agents.
"Theproperty market in Nanning is currently booming, especially in the areas ofresidential sales and rentals," says Daniel. "The home buyers purchase propertiesas a form of investment with average rental yield of about six to seven percent. Currently, all the projects are sold out. The upcoming project launch is 大润花乡里 -- a 200-unit landed property project, and weare very optimistic about it. Plans are also in the pipeline for us to moveinto commercial sales."
Nanninghas a population of over seven million people. Located near the Vietnameseborder, it used to be the poorest in the country, but since evolved into asecond-tier city that attracts investments. The presence of Zara Home,BreadTalk, MixC Shopping Mall (which typically opens in first-tier cities)signifies global interest in the city. There is an existing high-speed railwaylinked to Guangzhou, and there are plans to build another one that links toPingxiang on the Vietnamese border. This railway aims to connect Pan-PearlRiver Delta and southeast China with members of the ASEAN, with Nanning beingthe first stop.
DBS Bank Ltd. is the sole issue manager of theinitial public offering ("IPO") and listing of APAC Realty Limited. DBS BankLtd. assumes no responsibility for the contents of this
About APAC RealtyLimited
APAC Realty Limited ("APAC Realty", the "Company" ortogether with its subsidiaries, the "Group") is a leading real estate servicesprovider which operates a market-leading real estate brokerage in Singaporeunder the ERA brand. APAC Realty operates three main business segments -- thereal estate brokerage services; franchise agreements; and training, valuation,property management and other ancillary services.
APAC Realty's real estate brokerage services are operatedby its wholly-owned subsidiary ERA Realty Network Pte Ltd ("ERA Realty") underthe ERA brand. ERA Realty is one of Singapore's largest real estate agencieswith more than 6,000 agents registered, providing property brokerage servicesfor primary home sales, secondary home sales, and rental of residential,commercial and industrial properties.
APAC Realty holds the exclusive ERA regional masterfranchise rights for 17 countries in Asia Pacific, acquired from Realogy GroupLLC. The Group also holds the master franchise rights for Singapore forColdwell Banker, one of the oldest and most established real estate office andfranchising companies in the United States. As at 30 June 2018, there are 22Coldwell Banker Member Brokers in Singapore which collectively have over 100agents registered with them.
APAC Realty's wholly-owned subsidiary Realty InternationalAssociates Pte Ltd ("RIA") operates training programmes and courses for realestate agents in preparation for professional certification exams and as partof continuing professional development regulations. RIA also undertakesvaluation work on behalf of clients such as financial institutions, governmentagencies and property owners and provides property management services for realestate developments.