Ferrell plans new Asian property fund

[mr funny]

April 12, 2007, 6.02 pm (Singapore time)

Ferrell plans new Asian property fund


SINGAPORE - Ferrell Asset Management plans to launch a 500 million euro (US$673 million) property fund to lure European and Middle Eastern investors into the fast rising luxury housing and commercial markets in Singapore.

David Lee, managing director and founder of Singapore-based Ferrell, said on Thursday he was talking to investors about the new fund, which will likely double the firm's assets under management.

'We are looking at 500 million euro region with a key few institutions. I think we have European institutions and a couple from the Middle East,' he said at the Reuters Hedge Funds and Private Equity Summit in Singapore.

'We hope to do it as soon as possible because timing is important.'

Ferrell currently manages six funds worth US$500 million for its clients. Of that amount, 80 per cent is invested in residential and commercial property projects in Singapore.

The new fund would be the latest of several being raised this year for Asian property, including two US$1 billion funds by the real estate arm of ING Groep NV, and a US$1.29 billion fund from Citigroup.

Most are targeting Japan, which has around US$1.2 trillion worth of investment-grade buildings -- about two thirds of Asia's total, as well as fast urbanising India and China.

But Mr Lee said Ferrell's fund would invest in commercial and residential properties in Singapore and may branch out in the region to markets such as Hong Kong, Malaysia and China.

Ferrell is bullish on Singapore's high-end residential and commercial markets because the country's pro-business and pro-immigration policies are attracting investment from Europe and the Middle East.

A rising Singapore dollar is also likely to encourage foreign investment in the property sector, Mr Lee said. Among the beneficiaries of the boom are developers such as CapitaLand Ltd and City Development.

Singapore is still relatively cheap compared to other cities in the region. For example, top-notch 100-sq-m apartments are selling at about US$280,000, about a tenth of Hong Kong prices.

And the average yearly cost of occupying prime offices in Singapore is US$42 per square foot, compared with US$101 in Hong Kong, US$130 in Tokyo and US$180 in London, according to property consultants CB Richard Ellis. -- REUTERS

[mr funny]

Published April 13, 2007

HEDGE FUNDS

Ferrell plans new Asian property fund

500m euro fund targeted at European, Middle East investors


(SINGAPORE) Ferrell Asset Management plans to launch a 500 million euro (S$1 billion) property fund to lure European and Middle Eastern investors into the fast rising luxury housing and commercial markets in Singapore.

David Lee, managing director and founder of Singapore-based Ferrell, said on Thursday he was talking to investors about the new fund, which will likely double the firm's assets under management.

'We are looking at 500 million euro region with a key few institutions. I think we have European institutions and a couple from the Middle East,' Mr Lee said at the Reuters Hedge Funds and Private Equity Summit in Singapore.

'We hope to do it as soon as possible because timing is important.'

Ferrell currently manages six funds worth US$500 million for its clients. Of that amount, 80 per cent is invested in residential and commercial property projects in Singapore.

The new fund would be the latest of several being raised this year for Asian property, including two US$1 billion funds by the real estate arm of ING Groep NV, and a US$1.29 billion fund from Citigroup.

Most are targeting Japan, which has around US$1.2 trillion worth of investment-grade buildings - about two-thirds of Asia's total, as well as fast urbanising India and China. But Mr Lee said Ferrell's fund would invest in commercial and residential properties in Singapore and may branch out in the region to markets such as Hong Kong, Malaysia and China.

Ferrell is bullish on Singapore's high-end residential and commercial markets because the country's pro-business and pro-immigration policies are attracting investment from Europe and the Middle East.

A rising Singapore dollar is also likely to encourage foreign investment in the property sector, Mr Lee said. Among the beneficiaries of the boom are developers such as CapitaLand Ltd and City Development.

'Compared to 2004, we have seen a 100 per cent increase in prices of some of the high-end projects,' Mr Lee said. 'We don't think that is the end. There's still a lot of upside.'

Singapore is still relatively cheap compared to other cities in the region. For example, top-notch 100 sq m apartments are selling at about US$280,000, about a tenth of Hong Kong prices.

And the average yearly cost of occupying prime offices in Singapore is US$42 per sq ft, compared with US$101 in Hong Kong, US$130 in Tokyo and US$180 in London, according to property consultants CB Richard Ellis.

Singapore's government relaxed property ownership regulations and eased real estate financing rules in 2005 in order to encourage foreigners to invest in real estate and revive the sector after a prolonged slump.

Last year, private property prices climbed 10.2 per cent, with strong demand for luxury developments from foreign investors.

Charoen Sirivadhanabhakdi, Thailand's richest man according to Forbes magazine, recently made a substantial investment in Singapore's luxury property sector, The Business Times reported earlier this week.

The Thai tycoon snapped up 47 out of 48 apartments in a new project for $205 million and four entire floors at another project for $135 million, BT said.

Strong economic growth in China and India is benefitting Singapore, as many of the wealthy entrepreneurs and business people from those countries are investing in the city-state. - Reuters