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Thread: SG expects good returns from S'pore prime properties fund

  1. #1
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    Exclamation SG expects good returns from S'pore prime properties fund

    April 7, 2007

    SG expects good returns from S'pore prime properties fund

    Fund will invest in S'pore freehold condos; annual yield set to be around 12%-17%

    By Lorna Tan, Finance Correspondent



    JOINING IN: The fund is one way to tap into Singapore's growth as a financial and global centre, said Mr Baer, seen here with Mr Hirano. -- MAY LIN LE GOFF


    THE boom in Singapore's luxury property market is so hot that a French private bank has set up a first-of-its-kind fund specially to buy posh homes here.

    And despite the top prices that luxury homes have been fetching lately, the bank, Societe Generale (SG), expects strong returns for investors ahead.

    It expects annual yields of 12 per cent to 17 per cent over the next three years - and sees capital appreciation rather than rentals as the main source of growth.

    The fund is the first of its type in Singapore. It is somewhat like a mini-real estate investment trust, though which the properties are held for three years.

    SG hopes to raise US$100 million (S$151 million) through the Singapore Prime Residential Fund, launched in February, which will be invested in freehold condominiums that cost more than $1.5 million each.

    SG Bank & Trust's Singapore branch chief executive, Mr Pierre Baer, said the fund is one way to tap into Singapore's growth as a financial and international centre.

    'The Government's efforts to build Singapore as an international global city will attract expatriates and result in serious immigration across Asia including India,' he said.

    Mr Baer is also bullish on other plans to enhance Singapore as a medical and education hub, including a recent announcement of a potential population increase to 6.5 million and the upcoming integrated resorts.

    And there is a shortage of luxury residential properties which will be met only in two years' time so it is 'very safe to make a good investment' with the fund.

    Singapore is riding a wave of property price recovery, with new prices breaching even the $4,000 per sq ft levels around the prime Orchard Road area.

    According to SG Bank & Trust's managing director and global head for Japan, Mr Keiichi Hirano, the fund is a response to Japanese clients who want a slice of the Singapore growth story.

    Although the first tranche of the fund is denominated in yen, SG has plans to start Singdollar and US dollar tranches, which will also be invested in prime Singapore properties.

    The fund will be invested in condominiums in prime districts such as 9, 10 and 11, and they should come with a tenancy agreement that gives a minimum rental yield of 2.75 per cent a year.

    But rental is not the prime criterion for the fund, which is looking primarily at capital appreciation of these properties and the appreciation of the Singdollar against the yen.

    The first tranche has so far raised US$20 million, which has been invested in 10 to 15 condominiums.

    Although it is a three-year closed-ended fund, SG has the option of redeeming it early or extending it for another year.

    To qualify as an SG client, you must have a minimum of US$1 million in investible assets with the bank. To invest in the fund, a minimum sum of US$500,000 is required.

    Investors pay a annual management fee of 1.5 per cent and the fund pays a performance fee of 20 per cent to the investment manager Pacific Star Group, if certain criteria are met. Property specialist Pacific Star is tasked with the selection and management of properties in the fund.

    [email protected]

    RAISING FUNDS

    SG hopes to raise US$100 million (S$151 million) via the Singapore Prime Residential Fund, launched in February. The first tranche has so far raised US$20 million, which has been invested in 10 to 15 condominiums.

  2. #2
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    Default Re: SG expects good returns from S'pore prime properties fund

    Now I know why there have been several units snapped up at one shot by a single buyer.

    Take the Suites @ Cairnhill (Cairnhill Gardens enbloc) for example. High chances are this fund bought it up. The Sentinel at Surrey Road is another example.

  3. #3
    Observer
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    Default Re: SG expects good returns from S'pore prime properties fund

    Not only we have to fight with other buyers to get a unit, but now also with fund. It is getting tougher in this property market.
    Buy buy buy!
    People buy! Funds also buy!

  4. #4
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    Thumbs down Re: SG expects good returns from S'pore prime properties fund

    Crazy property agent , you get your 1% but people can lose 30-50% , be more caring ok? don't talk like that , don't be a greedy asshole .

  5. #5
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    Default Re: SG expects good returns from S'pore prime properties fund

    SocGen is in Cecil Street - not in Suntec.
    Need to drive there.
    If it is in Suntec, I could have just walk there and check this fund out.

    On the other hand, I could have bought a few units on my own with the $500,000.
    Let me challenge this fund. See who can make higher ROI. I can save the management fee too.

  6. #6
    Property Cashier
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    Default Re: SG expects good returns from S'pore prime properties fund

    Quote Originally Posted by Unregistered
    Crazy property agent , you get your 1% but people can lose 30-50% , be more caring ok? don't talk like that , don't be a greedy asshole .

    Hello! Don't be an asshÖle lah.
    There is no property agent in this thread what. I did not see anyone asking any body to buy anything what.

  7. #7
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    Default Re: SG expects good returns from S'pore prime properties fund

    Can't fight with us to get an unit, just say so. See people make, become sour grape and say people property agent. Crap!

  8. #8
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    Cool Re: SG expects good returns from S'pore prime properties fund

    Hahaha , after u get caught with your pants down , then see who cries in 2010 .

  9. #9
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    Default Re: SG expects good returns from S'pore prime properties fund

    Quote Originally Posted by Unregistered
    Hahaha , after u get caught with your pants down , then see who cries in 2010 .

    I will report to you the profit I make soon.
    Bye bye sour grape!

  10. #10
    Singapore
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    Default Singapore Q1 GDP beats forecast, policy unchanged

    Mia Shanley
    Reuters Singapore
    10 April 2007

    Singapore's economy grew an annualised 7.2% in the first quarter, slowing from the fourth quarter rate but exceeding forecasts, while the country's central bank stuck to a policy of modest currency appreciation.

    The Monetary Authority of Singapore (MAS) reiterated its expectations for growth of between 4.5 to 6.5% this year and said the external environment would remain broadly supportive of sustained growth.

    But it said a number of risk factors had emerged.

    "US economic growth has lost some momentum, led by the correction in its housing sector, and the problems in the subprime mortgage market may yet lead to some retraction in consumer spending," the MAS said in its twice-yearly statement."

    It added that the global IT industry remained weak on a build-up of inventories and strong competitive price pressures.

    The MAS also held on to its forecast for inflation of 0.5 to 1.5% in 2007, even though analysts say inflationary risks are on the rise due to higher asset prices and a planned increase in the goods and services tax from July 1.

    The Singapore dollar, which has been trading at a near-decade high, drew further support from the news, rising as far as 1.5115 per U.S. dollar.

    The central bank, which conducts policy through the Singapore dollar rather than through interest rates, said conditions in the IT industry would likely remain sluggish till later in the year, but added that the economy would be supported by growth in services.

    "This suggests some decoupling from the U.S. slowdown," said Chua Hak Bin, an economist at Citigroup, who expects GDP to land at the top end of the government's forecast range.

    The first-quarter expansion compared with 4.9% growth forecast by economists in a Reuters poll and followed a 7.9% expansion in the fourth quarter of 2006, the Ministry of Trade and Industry said in its advance estimate for the quarter.

    Analysts expect the island will draw support from new areas such as financial services, tourism and a fast-recovering construction sector thanks to major projects such as two multi-billion dollar casinos.

    From a year ago, gross domestic product was 6.0% bigger in the first quarter, above expectations for 5.4% growth.

    The advance estimate, based largely on data from January and February, gives an early indication of the economy's performance in the January-March period.

    Economists said unexpectedly strong growth in the construction sector, which expanded by 7.0% in the first quarter, helped offset slower manufacturing output.

    Singapore is seeing a flurry of projects in both the public and private sector as residential property prices pick up and as work started on one of two planned casinos.

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