http://www.businesstimes.com.sg/arch...apore-20131022

Published October 22, 2013

S'pore still a viable investment spot: Chesterton Singapore

Overseas investors see the Republic as a safe haven to park their money

By Mindy Tan [email protected]


MORE foreign investors and investment funds are likely to descend on Singapore in the next 12 months, as confidence in local market continues to ride high, Chesterton Singapore's managing director Donald Han has said.

Singaporeans may view the market as being overpriced, which is keeping yields depressed, but overseas investors see the Republic as a safe haven to park their money, he said at the official launch of Chesterton Singapore yesterday.

Singapore is not a place for quick or high returns, he added, but having Singapore assets in one's portfolio commands prestige and recognition. "And the fact that your money is safe in a climate where inflation rates are still high and interest rates are fairly low, providing 3 to 4 per cent net yields, can be quite compelling."

This climate of interest will be further supported by the proliferation of real estate investment trusts (Reits) which have hit the market in the last 12 months, as well as those waiting in the wings for the right opportunity to launch their initial public offering, such as Frasers Hospitality Trust, Viva Reit, and M&L Hospitality Trust.

The hospitality sector, in particular, has drawn a lot of interest. In the third quarter of this year, it closed some $0.91 billion in sale transactions, aided mainly by the sale of the Grand Park Orchard, Gallery Hotel and The Sentosa Resort & Spa.

Mr Han said: "That's basically about 27 per cent of all hotel market activity in the Asia-Pacific in the last quarter. It speaks a lot that the volume of interest - in terms of investors coming to this part of the world - is more pronounced than in the previous quarters."

New Reits aside, existing Reits such as CDL Hospitality Trust are looking to expand their portfolio, pointing to the opportunities to be had, he said.

It is for this reason that the hospitality sector will likely remain a key engine of growth for Chesterton Singapore, Mr Han said, even as he disclosed that the firm will play a more active role in marketing overseas projects.

The consultancy will launch its first overseas project, Tebrau8 Residences, in the coming two weeks. Located in Iskandar Malaysia, this is a luxurious high-rise residential development comprising 342 apartment units with duplex and dual-key configurations.

Chesterton Singapore is also looking to leverage on Chesterton Global's strength in the United Kingdom's residential segment and introduce UK projects by the end of this year.

"You will see us being more visible in terms of bringing UK/London properties into this part of the world. Any time the market gets near its peak, investors in this part of the world will look for new places to put their money. So Singapore will be the hub for money that is looking into investing abroad," said Mr Han.

Chesterton Global intends to market projects from Dubai through the Singapore office in the longer term, said Robert Bartlett, the group chief executive of Chesterton Global.

He said that a key criteria for associate firms is that they must not only be successful in their own marketplace, they must also be successful in assisting in the distribution of capital around the world.

Chesterton has thus found it imperative to have an office here, as a base for South-east Asia to complement its strong presence in the Middle East and North Africa (Mena) through its Dubai office, and Europe through its London offices.

Mr Bartlett added: "We are very firm believers in Singapore as a hub for the rest of South-east Asia. Unfortunately for us, our previous existence here - while successful - never achieved what we wanted from it in terms of becoming a springboard for us to then develop the business around the region . . .

"We see Singapore as very important for us, not just in terms of what we do in London, but also what we do across the Middle East for instance," he said.

Mr Han said that now was a great time to have an office in Singapore. Cash-rich developers are starting to pursue a diversification strategy, he said, citing Oxley Holdings' inroads into the region, including Malaysia and Cambodia, and Hiap Hoe Limited starting land-banking in Australia.

"Developers are starting to think: 'Where else can I put my money because Asia is a bit over-sold, and the price point is at a tip right now?' So you need to go into markets which are a bit more compelling, with a global audience.

"So I think it's more timely, now than ever before, to have a hub here and facilitate that flow and help companies look for opportunities. It is not just about finding a site, buying, and building it. It's really about helping them in project management and property management," he added.