2 Singapore good class bungalows on Leedon Road up for sale

2 Singapore good class bungalows on Leedon Road up for sale
A PAIR of recently completed Good Class Bungalows at 37 and 39 Leedon Road are being launched by their developer George Lim. His asking price is about $35 million for each bungalow. The plots’ land areas are 22,000 square feet and 21,000 sq ft respectively.
Each five-bedroom, two-storey freehold house has a basement garage for up to five vehicles.

The exteriors are clad in natural sandstone, while inside there is AMX movie-on-demand hardware.

Mr Lim launched his maiden project in 2005 with three Good Class Bungalows built on a 50,000 sq ft site in the Belmont area.

Source : Business Times  - 22 Feb 2008

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Singapore Tanjong Pagar hotel site may fetch $750 psf ppr

Singapore Tanjong Pagar hotel site may fetch $750 psf ppr

By KALPANA RASHIWALA

CONTINUING its rollout of hotel sites amid the current shortage of hotel rooms, the Urban Redevelopment Authority yesterday made available for application a reserve-list site in the Tanjong Pagar area.
The 99-year leasehold site, at the corner of Gopeng Street and Peck Seah Street, can be developed into a 30-storey hotel with about 330 hotel rooms.

The site will only be launched for tender upon successful application by a developer with an undertaking to bid at a minimum price which is acceptable to the state.

CB Richard Ellis executive director Li Hiaw Ho estimates that the plot could be worth about $700-750 per square foot of potential gross floor area.

Around the middle of last year, URA sold nearby hotel sites at Tanjong Pagar Road for $573 psf per plot ratio and $562 psf ppr.

The planning authority also awarded a hotel plot at Upper Pickering Street at $805 psf ppr and another plot at New Market Street/Merchant Road for $762 psf ppr in October 2007.

The latest plot, with a 2,311.3 square metre land area, has an 8.4 plot ratio (ratio of maximum potential gross floor area to land area) and a 30-storey height limit.
 
‘The plot will be ideal for a four-star business hotel serving the needs of businesses in the Central Business District,’ Mr Li said.

URA said that the Tanjong Pagar area was a ‘prominent gateway leading directly into the main financial and business areas of Shenton Way, Raffles Place and Marina Bay’.

‘It is also home to several hotels which have been established to serve the business community and tourist visitors. These include business hotels like the Amara and M Hotel, as well as award-winning hotels like Berjaya Hotel and The Scarlet.’

The planning authority, which is due to release Master Plan 2008 later this year, also noted that ‘the successful sale and on-going development of several new office, high-rise residential and hotel sites in the area will further enhance the vibrancy and activities of the Tanjong Pagar commercial district’.

Source : Business Times  - 22 Feb 2008

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Office rents in S’pore on upward climb: property firms

Office rents in S’pore on upward climb: property firms

By UMA SHANKARI
THE occupancy cost for office space in Singapore is now higher than in Hong Kong, according to a new report.
Data from property firm CB Richard Ellis (CBRE) show that total occupancy cost here hit US$10.42 per square foot per month (psf pm) at the end of 2007.

By comparison, total occupancy cost for Hong Kong was US$9.74 psf pm at the end of last year.

Total occupancy cost reflects base rents as well as other property-related expenses such as management fees and property tax, according to CBRE.

Prime office rents in Singapore rose 19.1 per cent in just the fourth quarter of 2007, CBRE’s report said. For the entire year, office rents rose a staggering 92.3 per cent.

‘Competition for pockets of vacant space in the central business district (CBD) remained intense, and several expansion transactions towards the end of the (fourth) quarter suggested that demand may be sustained,’ CBRE said.

In response to the report, the Urban Redevelopment Authority (URA) pointed out that CBRE represents just one viewpoint.

A recent Cushman & Wakefield (C&W) report, for example, said that office occupancy cost for prime office space in Singapore was US$10.80 psf pm in end-2007, much lower than the US$19.90 psf pm in Hong Kong.

The discrepancy between the two sets of data was due to the fact that CBRE considers office space in Hong Kong’s CBD as well as other areas outside the city centre when compiling office occupancy cost data for Hong Kong - while C&W only considers Hong Kong’s CBD. Both firms look only at Singapore’s CBD when calculating occupancy cost here.

Separately, property firm Savills - which said that office rents in Singapore are close to Hong Kong’s at present - predicted that rents here could increase by another 15-20 per cent this year.

Office rents in Hong Kong, on the other hand, are expected to rise by a slower 5 per cent in 2008, said Simon Smith, Savills’ head of research and consultancy. He expected rents in Singapore to overtake rents in Hong Kong sometime this year.

Mr Smith also said that luxury home prices in Singapore will climb 8-12 per cent this year, after jumping about 50 per cent in 2007.

Source : Business Times  - 22 Feb 2008

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Property sector braces for tougher times in 2008 - Singapore

Property sector braces for tougher times in 2008 - Singapore

Players feel squeeze from more credit woes and soaring construction costs
By UMA SHANKARI
THE property market in Singapore is set to face a challenging year ahead as it continues to take hits from the sub-prime crisis in the United States and rising construction costs, industry body Real Estate Developers’ Association of Singapore (Redas) said.

Toss for luck: Enjoying ‘yu sheng’ at the celebration yesterday were (from left) Mr Cheong, Ms Fu and Kwee Liong Keng, immediate-past president of Redas 
‘Unfortunately, the sub-prime woe continues to hog the headlines,’ saidRedas president Simon Cheong, during Redas’ annual Chinese New Year celebration yesterday. ‘Six months’ ago, we were concerned with the market exuberance. This coming six months, we are wondering when the market will turn around.’

Construction cost is also spiralling upwards at an unprecedented rate, Mr Cheong said.

The property market’s expected slowdown comes on the back of an exceptionally good 2007. Last year, a record-breaking 14,800-plus residential units were sold, the office occupancy rate hit 93 per cent and the hotel sector saw a occupancy rate of 87 per cent.

But this year, with more write-downs for sub-prime exposure expected from major financial institutions - which could affect home prices and demand here - and high construction costs affecting margins, developers are bracing themselves for tougher times ahead.

‘We are concerned that construction costs have gone up so sharply and squeezed (developers’) profit margins so much that a small decline in the the final selling price will affect developers severely,’ said CB Richard Ellis’ chairman for Asia, Willy Shee. ‘A small increase in construction cost and a small decline in selling price will put developers in a very difficult situation.’

Minister of State for National Development Grace Fu, who was guest-of-honour at Redas’ event yesterday, similarly said that the property market’s prospects are dependent on how the sub-prime crisis is going to affect sentiment in the region.

Mr Cheong believes that the market will ‘get some traction back’ in the second half of this year.

Interest rates in Singapore are at a record low, which will encourage home ownership, he said. And the influx of expatriates at all levels coming to Singapore - on the back of an anticipated office supply of 15 million sq ft over the next three to four years - will also provide a boost to the property market, Mr Cheong said.

‘Removal of estate duty also helps,’ said Chia Ngiang Hong, Redas’ first vice-president and group general manager of City Developments. ‘The super-rich will focus on Singapore again.’

Analysts, worried about developers’ prospects for this year, are already starting to recommend that investors put their money into the more diversified property companies and/or switch to real estate investment trusts (Reits).

‘In the current volatile market environment, we recommend stocks of listed property companies with strong balance sheets offering multiple-sector presence and geographical diversification,’ said UOB Kay Hian analyst Vikrant Pandey. Citigroup analyst Wendy Koh said: ‘In the light of the current uncertainties, we retain our preference for Reits over the developers.’

Source : Business Times  - 22 Feb 2008

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Singapore Parkway justifies record land bid with vision for a ‘hospital of the future’

Singapore Parkway justifies record land bid with vision for a ‘hospital of the future’

Focus will be on cardiology, oncology and orthopaedics
By CHEN HUIFEN
 

(SINGAPORE) Parkway Holdings will be building on its newly-acquired Novena site what it calls a ‘hospital of the future’, that will incorporate a hub of top medical professionals, with the latest technology, organised along a high level of thoughtfulness for the patient.
 
Mr Seow: Parkway had to secure the land to manage patient turnover better 
Speaking to the press and analysts for the first time since winning the Novena hospital site at a record bid of $1,600 per square foot per plot ratio (psf ppr), Parkway’s management yesterday justified the price - more than double the second-highest bid of $694.50 psf ppr.

‘We are already operating with capacity constraints at our present facilities, and with the ageing population and changing demographics, we would not be able to contribute as much as a leading private healthcare provider,’ said group president and CEO Lim Cheok Peng.

‘Administratively, we have begun to move non-clinical functions off-site to free up more space for the hospitals. This would not be enough as the shortfall for private patient beds by 2012 could be as many as 2,000.’

Parkway - which houses 767 beds at the Mt Elizabeth, Gleneagles and East Shore hospitals - is already operating at about 70 per cent capacity. For a long-term solution to better manage patient turnover and expand its catchment of international patients, ‘it had to secure the land’, said chairman Richard Seow.

Development cost for the new hospital is estimated to be $300-500 million. To be completed by July 2011, it will have a 15-storey tower, linked to a five-storey podium block that will house mainly medical suites, retail and lobby areas.

The development will have a maximum gross floor area of 72,350 sq m, of which 30 per cent will be set aside for medical suites and 5 per cent for retail space. A large part will be taken up by the 324 patient rooms planned, and the rest for diagnostics and ancillary services, and a 255-lot basement carpark.

The new private hospital will focus on cardiology, orthopaedics and oncology specialties. It will also feature 100 per cent single rooms, patient floor balconies, gardens and rooftop landscape to enhance the inclusion of light and nature in a healing environment. The architect for the project is Hellmuth, Obata + Kassabaum (HOK).

Parkway was unable to discuss financial details ahead of the announcement of its full-year results, scheduled for release next Wednesday. But it had earlier indicated that the acquisition of the land, amounting to more than $1.2 billion, and the development cost will be financed through a mix of internal resources and bank borrowings.

Parkway shares have taken a beating this week since the award of the tender for the Novena site on Monday.

On the same day, its shares fell 8.3 per cent to $3.30 on concerns that the group may have overpaid for the land.

But COO Daniel Snyder yesterday expressed confidence in the project, saying that his strategy and business development team has been receiving calls from parties with investment offers.

The group has also received ‘unanimous support from our accredited doctors and partners’.

Parkway shares ended 4 cents lower to close at $3 yesterday.

Source : Business Times  - 22 Feb 2008

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S’pore’s Olympic dream comes true

S’pore’s Olympic dream comes true

It wins right to host YOG 2010; SMEs poised to ride branding boom
By NISHA RAMCHANDANI

(SINGAPORE) Shortly after 7pm yesterday, the Padang erupted.
 
Face that says it all: Crowds at the Padang celebrating the choice of Singapore as host for the first Youth Olympic Games in 2010 
The two-horse, Moscow-versus-Singapore race to host the very first Youth Olympic Games (YOG) in 2010 had just seen Singapore breast the tape first, and everyone - from the Prime Minister to the other VIPs present to the business community and the thousands of schoolchildren - let their emotions show.

‘We dared to dream, we worked hard to pursue our dream despite the odds. Now that dream will become a reality,’ said Prime Minister Lee Hsien Loong to the cheering crowds who had seen the announcement broadcast ‘live’ on a giant screen.

‘It will be the first time that the Olympic flame will be in South-east Asia and in Singapore. We will be the focus of a new era for sporting development for South-east Asia and Singapore,’ PM Lee added.

Small and medium-sized enterprises (SMEs), in particular, can stand to benefit from the hosting of the YOG.

Parliamentary Secretary for the Ministry of Community Development, Youth, and Sports, Teo Ser Luck, emphasised that the YOG would be a platform to help local companies, possibly through second-tier sponsorship.

‘Olympics is a big brand name. The main sponsors of the Olympics are global brands. What I hope to do is to have the YOG to bring up the brand awareness of our local companies, especially the SMEs,’ he said.

The win comes after seven months of stiff competition. The initial list of 11 cities was whittled down to two before Singapore pipped Moscow thanks to its top-notch infrastructure, strong governance and security.

The next step for Singapore is to set up an organising committee, which is expected to include people from both the government and private sector. Ng Ser Miang, the International Olympic Committee member from Singapore, is expected to chair the committee.

Elim Chew, president and founder of 77th Street, who has been rallying business associates to show their support, told BT that she had been confident that Singapore would win. ‘We reflect what Olympism is about - youth, spirit and community. The whole nation played a part. In the last one month, the atmosphere really built up,’ she said, adding that the economy would reap rewards. ‘It is important to build up Singapore businesses as it goes back to the economy.’

In recent months, over 700 companies have come forward to back Singapore with whole-hearted support and raise awareness through banners, videos, websites and car decals.

The YOG, which will be held in August 2010, is expected to welcome some 5,000 athletes and officials and will offer contests in 26 different sports.

Source : Business Times  - 22 Feb 2008

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Quieter Singapore property market but outlook favourable in long run

Quieter Singapore property market but outlook favourable in long run 

By Joyce Teo, Property Correspondent & Fiona Chan, Property Reporter 
 
THE real estate roller coaster that developers have ridden in recent years has taken a sharp turn, thanks to United States sub-prime woes, and left the industry wondering what is coming next.
‘Six months ago, we were concerned about the market exuberance,’ said Mr Simon Cheong, the president of the Real Estate Developers’ Association of Singapore (Redas), yesterday. ‘These coming six months, we will be wondering when the market will turn around.’

After an exceptional year of strong prices and sales, the sector has slipped into the doldrums, with buyers and sellers taking cover from the onslaught of a global economic uncertainty, America’s sub-prime mortgage crisis, stock market turmoil and escalating building costs.

Mr Cheong told a Redas Chinese New Year lunch: ‘Though Asia’s economy has a strong buttress - China - the temporary effect of weak sentiment from sub-primes will affect buying for at least the first half of this year.’

Sellers are also lying low, with developers delaying launches and pushing back project completion dates amid the construction squeeze.

Building costs have climbed at an ‘unprecedented rate’, added Mr Cheong, who is also chairman and chief executive of SC Global Developments. ‘What is clear is that developers are bearing the brunt of higher construction costs. Something’s got to give eventually.’

Developers will have to factor in high construction costs when they replenish their land bank, he said.

However, in the longer run, the market outlook is favourable, considering the Singapore economy’s sound fundamentals.

‘Rental yields will eventually dictate and underpin what capital values will be for property,’ said Mr Cheong. The expected slowdown in supply will support the rental market.

Minister of State for National Development Grace Fu told the media during the lunch that the market may be quiet, but prices are firm while demand for commercial property is still resilient.

Those sentiments were echoed by consultancy Savills Singapore, which expects the office sector to stay buoyant.

Deputy managing director Simon Smith told a press conference that average prime rents should match Hong Kong’s by the second quarter and surpass them by year-end.

This is because Hong Kong will see a lot of new supply coming onstream this year while Singapore’s supply will remain tight in the short term, he said.

But higher rents in Singapore may not be enough to push businesses to Hong Kong. ‘Many clients we see switching between the cities tend to do so because of strategic reasons rather than cost reasons,’ said Mr Smith.

Source : Straits Times  - 22 Feb 2008

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Development fees may jump for Singapore non-residential sites

Development fees may jump for Singapore non-residential sites 

For residential areas where strong land sales have lifted values, charges could surge

By Fiona Chan, Property Reporter 
 
DEVELOPERS may soon have to pay more to redevelop non-residential sites such as land for hotels or hospitals.
A key government fee for redeveloping sites will be revised again next month, and property consultants expect it to be raised for land used for purposes other than to build homes.

The good news is: Development charges should not jump much for residential plots this time, after already having been jacked up a few times last year.

Selected areas, however, could still see bigger fee hikes, said consultants. These include Novena, Geylang, Ang Mo Kio and Orchard Boulevard, where recent strong land sales have pushed up values.

Development charges, which can amount to millions of dollars, are based on recent land and property values. They are calculated based on sectors and 118 locations, and adjusted in March and September every year to keep them up to date.

A rise in these charges for residential sites in some areas means that, for instance, it would be more expensive for developers to buy and redevelop collective sale estates in these parts of Singapore.

MODERATE RISES
Overall, the current slowdown in the housing market means that the upcoming round of revisions for development charges should result in only very moderate rises for most residential sites.
BUOYANT ACTIVITY
On the other hand, non-residential sites - including hospital, hotel, office and industrial land - are still seeing buoyant activity and could be subject to heftier fee hikes.
 
Overall, however, the current slowdown in the housing market means that the upcoming round of revisions should result in only very moderate rises for most residential sites.

Development charges for non-landed residential sites are likely to go up by only 10 per cent on average, compared to 58 per cent last September, said Ms Tay Huey Ying, the director of research and consultancy at Colliers International.

She said the soaring land prices that sent development charges surging last year have ’screeched almost to a halt’ since last September.

In particular, the collective sale market - previously the main driver of spikes in development charges - has quietened to near-silence in the last few months.

Consultancy CB Richard Ellis also said it expects only ‘moderate increases’ in selected locations. These include Sixth Avenue and Sentosa for landed sites and Ardmore and Orchard Boulevard for non-landed sites.

It suggested that the Government may also slow the rate of rises in development fees after taking into consideration the ’subdued state’ of the residential market. The once-frenzied response to both development sites and new home launches has waned significantly.

On the other hand, non-residential sites - including hospital, hotel, office and industrial land - are still seeing buoyant activity and could be subject to heftier fee hikes.

Hospital land could see the biggest overall hike in charges, boosted by the recent record bid for a state-owned site at Novena, said Colliers’ Ms Tay. She is projecting a rise of between 15 per cent and 20 per cent on average for hospital sites.

DTZ Debenham Tie Leung added that funds have been moving their investments into hospital assets in Singapore, which could also prompt a rise in the development fees for this sector.

Also, industrial land - which saw a rise in development fees of just 2 per cent in the last round - should experience a much bigger jump, said consultants.

Office and hotel plots are also expected to have their development charges raised, by at least 30 per cent, said Jones Lang LaSalle.

Its director for South Asia research, Mr Chua Yang Liang, said the fees could be pushed up by recent office land sales at Jalan Sultan and Toa Payoh, and hotel plot sales at Upper Pickering Street and New Market Road.

Source : Straits Times  - 22 Feb 2008

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CapitaLand raises Singapore Ascott stake to 91.7%

CapitaLand raises Singapore Ascott stake to 91.7% 
 
CAPITALAND is on track to delist its serviced apartment unit, The Ascott Group, after lifting its stake in the firm to 91.7 per cent.
The property giant said yesterday that once its offer expires next Tuesday, Ascott shares ‘may be suspended’ by the Singapore Exchange.

CapitaLand has stated its aim of delisting Ascott. It has said it ‘will not take any action for such trading suspension to be lifted’.

Under listing regulations, the shares of companies with less than 10 per cent of freely available shares may be suspended.

In a surprise announcement last month, CapitaLand made an offer of $1.73 per share for Ascott shares held by minority shareholders. CapitaLand, which already held 66.5 per cent of Ascott’s shares then, added that it did not intend to revise its offer, which represented a 43 per cent premium over Ascott’s then-last traded price of $1.21.

The price was a massive 145 per cent premium over Ascott’s book value of 70.6 cents, and about 17 times Ascott’s earnings in the 2007 financial year.

Just last week, independent financial advisers recommended that Ascott’s minority shareholders either take CapitaLand’s offer or try to sell the shares on the open market before the offer closed.

Ascott is the biggest operator of serviced apartments in Asia and Europe.

CHUA HIAN HOU
 

Source : Straits Times  - 22 Feb 2008

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UOL still bullish on Singapore office rentals

UOL still bullish on Singapore office rentals 
 
OFFICE rents have been skyrocketing over the past 12 months but property group UOL Group reckons there will still be further rises to come.
The firm reported stellar full-year results yesterday. It said rents for retail space should benefit from high levels of employment, as well as strong tourist arrivals, although the pace of increase will moderate.

UOL is cautiously optimistic about the residential market and will launch three projects this year - Nassim Park Residences, Breeze by the East in the East Coast area and Green Meadows opposite Peirce Reservoir.

Its plans came with news yesterday of a 124 per cent jump in net profits to $758.9 million, on the back of a hefty revaluation gain.

The gain of $590.5 million on UOL’s investment properties boosted profit to such an extent that they exceeded revenue, which came in 18 per cent higher at $709.1 million for the 12 months to Dec 31.

Revenue from hotels was higher, due to improved numbers from hotels in Singapore, Australia and Vietnam. The inclusion of revenues from the former Negara on Claymore, now known as Pan Pacific Orchard, and subsidiary Pan Pacific Hotels & Resorts, also helped.

Full-year earnings per share rose from 42.72 cents to 95.38 cents, while net asset value per share rose to $4.96 per share as at Dec 31 last year from $3.97 previously. A final dividend of 10 cents a share and a special dividend of five cents apiece were declared.

Source : Straits Times  - 21 Feb 2008

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CapitaLand, HPL sue eight owners of Singapore Gillman Heights

CapitaLand, HPL sue eight owners of Singapore Gillman Heights
 
Developers claim contract breach as owners seek ruling over validity of sale

By Fiona Chan, Property Reporter 
LEGAL ACTION: CapitaLand and Hotel Properties, which have agreed to buy the 607-unit Gillman Heights Condominium in Alexandra Road for $548 million, are claiming the eight home owners are breaching their contractual obligations. — PHOTO: CAPITALAND
 
A GROUP of home owners in Gillman Heights Condominium are being sued by the estate’s buyers for alleged breach of contract.

They face legal action by CapitaLand and Hotel Properties (HPL), which have agreed to buy the sprawling 607-unit estate in Alexandra Road.

The eight owners, who together own four units, had filed an application to the High Court last Monday. They want to know if a supplementary deal to the original collective sale agreement is valid.

The developers responded yesterday, claiming the action breached the owners’ contractual obligations, which includes an undertaking not to do anything detrimental to the sale process.

However, the owners argue that they need their question about the sale deal answered by the High Court before they can be said to have assumed such contractual obligations.
Their question stems from Gillman Heights’ unusually complex sale process, which involved two collective sale agreements. The original expired on June 22 last year, and a supplementary agreement was tacked on to extend it. Most majority sellers signed both; minority owners did not sign either one.

The eight owners being sued said they, and some others, signed the first deal but not the supplementary one.

They say they are caught in a unique position between the majority and minority owners. The group also claims that some of the signatures on the supplementary agreement came in after the deadline. If these tardy signings were excluded, the second agreement may not reach the required 80 per cent owners’ consent.

‘All they want is a judge to decide whether there was a valid extension or not, and if not, what are the consequences,’ said lawyer N.Sreenivasan of Straits Law, which is representing the eight owners.

‘Collective sales are in fact a form of compulsory acquisition, and even those who have signed the collective sale agreement have only agreed to tie themselves up for a fixed period of time.’

Mr Pang Tee Lian and his wife are among the eight owners facing legal action. Mr Pang, 59, said yesterday: ‘We know we’re fighting someone with very deep pockets, so we’re scared. But we’re also frustrated.’

‘In my mind, a collective sale is a win-win situation, with a happy seller and happy buyer. We’re not out to make an extra buck for the fun of it,’ added Mr Pang, a general manager at an architectural firm. ‘We just don’t know where we stand: Are we the majority or minority?’

In fact, groups representing both majority and minority owners have also clashed with CapitaLand and HPL, which last year agreed to pay $548 million for Gillman Heights.

At least one unhappy majority seller circulated letters among his neighbours earlier this year calling for a concerted action to invalidate the sale. CapitaLand responded with a series of legal letters threatening to sue for breach of contract.

In the meantime, the condo’s minority owners want the High Court to overturn the sale, which got the go-ahead in December from the Strata Titles Board, the body that governs collective sales.

Their appeal hearing will take place next Monday.

This series of legal clashes is fast becoming an eerie echo of the prolonged tussle over the collective sale of Horizon Towers in Leonie Hill.

That struggle started last May after some majority owners tried to back out of the deal. They were subsequently sued by the buyers - which incidentally include HPL - while minority owners are now appealing against the sale.

 Property row

‘We know we’re fighting someone with very deep pockets, so we’re scared. But we’re also frustrated…We just don’t know where we stand: Are we the majority or minority?’

MR PANG, explaining why he and seven other home owners filed the application to the High Court

‘Any extension must be very carefully scrutinised.’

MR N.SREENIVASAN of Straits Law, which is representing the home owners
Source : Straits Times  - 21 Feb 2008

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Asian real estate securities now offered to retail investors - Asia

Asian real estate securities now offered to retail investors  - Asia

By Yang Huiwen 
 
REAL estate has been the hottest investment topic in Singapore over the last year or so, and now retail investors have a new avenue for investing in Asia’s property market.
An arm of Deutsche Bank - RREEF - on Monday launched three new funds investing in property, backed by a belief that the sector has plenty of upside in Asia.

Asian real estate is at an ‘early stage of a long-term structural uplift’, said RREEF Asia Pacific real estate securities head Daniel Ekins.

RREEF said these new funds - previously exclusive to institutional and wealthy investors - are now offered to local retail investors. A minimum investment of US$1,000 (S$1,400) is needed.

‘Asia’s rising prosperity and consistent high economic growth have driven greater demand for residential and commercial real estate, creating exceptional growth potential for real estate securities in the region,’ said Mr Ekins.

Asia-listed real estate developers and real estate investment trusts (Reits) look set to deliver as much as a 20 per cent profit growth this year, he added. Global real estate securities have outperformed global stocks by 12.5 per cent and bonds by 24.6 per cent over a five-year period, the bank said.

One of the funds, the Asia-Pacific Real Estate Securities Fund, has a pure Asian focus, and will add to a growing crop of similar products, including the Barclays Asian Real Estate Income Fund and the Henderson Asia-Pacific Property Equity Fund.

Mr Ekins expects yearly returns of 12 per cent to 17 per cent in about five years.

Reits will comprise 20 per cent of the fund’s investment, while the remaining consists of publicly traded firms that own, develop or manage real estate.

RREEF has 65.2 billion euros (S$135 billion) in assets under management worldwide, with 10 billion euros in the Asia-Pacific.

Source : Straits Times  - 20 Feb 2008

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