Love affair with property pays off

Love affair with property pays off
Senior bank officer’s early land purchases helped to build financial muscle for bigger investments
By Lorna Tan, Senior Correspondent

Stanchart Private Bank global market leader Alice Waller (right), 53, seen here with her daughter Claire and Claire’s fiance Andrew Wynne, was born in South Korea. She studied in the US and has lived and worked in Australia, South Korea and Singapore. She owns two condo units and a farm in Australia. — ST PHOTO: SAMUEL HE

Korean-born Alice Waller has lived and worked outside South Korea, especially in Australia.

It is no wonder her love affair with properties is played out largely in Australia instead of her home country.

Her family moved to Australia when she was 10. She later studied in the United States and worked in South Korea for a few years before a 10-year stint in Singapore running a manpower services business.

She then spent 15 years at the National Australia Bank, based in Australia and New Zealand, till early last year. That was when she returned to Singapore to join Standard Chartered Private Bank as its senior director and global market leader. Her primary role is to reach out to the high net-worth Korean community worldwide.

Mrs Waller, 53, said her property investments have paid off handsomely.

She made her first property investment when she obtained her MBA from the University of California, Los Angeles, in 1982. She invested her savings of A$34,000 in two pieces of neighbouring land, each at 7,000 sq ft, in Adelaide, Australia. She sold them four years later when land prices doubled.

Armed with the sales proceeds and her savings, she bought another two pieces of land, this time costing her A$60,000. It helped that there was no capital gains tax in Australia then. Before long, her wealth had grown.

Now that she is more financially sound, she prefers to go for ‘blue chip’ property in prime locations because she believes that their values would go down last in a crisis but would go up first during good times.

Currently, she has two condo units in Melbourne and a farm in Victoria, Australia.

She is married to an Australian banker and has two children, Claire, 26, and Simon, 23, from a previous marriage. Mr Waller and her two children are based in Melbourne.

Q: Are you a spender or saver?

I am a saver. I spend 30 per cent and save 70 per cent of my income.

Q: How much do you charge to your credit cards every month?

I have three cards and I charge almost all my expenses, about $2,000, to them. I pay off the full amount so that I do not have to pay any interest. I withdraw $500 a month from the ATM.

Q: What financial planning have you done for yourself?

While I spend 30 per cent of my income, the balance is being invested in this manner - 20 per cent is channelled to pay off my mortgages, 30 per cent is invested in short-term products such as term deposits, and 20 per cent is parked in mid- to long-term investments such as unit trusts and capital guaranteed products. Of this 20 per cent, 15 per cent is invested in riskier products like derivatives while 5 per cent is invested in fixed-income products like capital guaranteed bonds.

I like to have more cash holdings now as I’m looking out for more opportunities to invest.

My target return is about 10 per cent per annum on my investments and 5 per cent per annum on property.

Q: Moneywise, what were your growing-up years like?

I come from a large family of seven kids. I am the fifth child. My dad was a businessman who manufactured safes and re-modelled antique cars. Because of his business ventures in Australia, my family lived in Adelaide between 1966 and 1970. They were in Brunei from 1970 to 1988. My mother was a teacher but she became a housewife when we left Seoul. I went for further studies in the United States when I was 18, so I learnt the importance of being financially independent from a young age. It was my father’s belief in owning land that inspired my interest in real estate.

Q: How did you get interested in investing?

After my graduation, I took my father’s advice and started to invest in property. Later, I diversified my investment into other financial instruments.

Q: What property do you own?

I own two properties which come with 24-hour concierge services in St Kilda Road, Melbourne.

I bought a three-bedroom unit at the Melbournian Apartment for A$1.9 million in 2004. Its annual rental yield is about 5.6 per cent. In January this year, I bought a 1,300 sq ft unit at the Metropolitan Apartment, also in St Kilda Road, for A$850,000 (S$970,000). My son is currently living there.

Back in 2000, I bought a 250ha cattle farm in Victoria for under A$500,000. The rental yield is about 4 per cent per annum. The returns are not high but we bought it for sentimental reasons because the farm used to belong to my husband’s family.

Q: What’s the most extravagant thing you have bought?

A fur coat which I bought in South Korea in the early 1980s that cost US$3,000. It was very expensive and it seemed like a good idea then. But my career has since taken me to Asia where I have little or no opportunity to wear it. I’ve worn it only twice. I regret buying it as I could have made better use of my money.

Q: What’s your retirement plan?

I am hoping to have my own home without any loan or repayment to worry about. I would like to have an income of S$10,000 a month after tax when I retire. I intend to stop work at 60 if my health permits and I hope I will be financially independent at 57.

When I do retire, I want to do charity work, just like my mum. My dream is to set up a home for the aged outside Seoul. It will be a small house with 20 rooms and a nurse. It will be free for the residents.

Q: Home is now…

A rented apartment at the Caribbean at Keppel Bay.

Q: I drive…

A silver Lexus IS250.

WORST AND BEST BETS
Q: What has been your worst investment to date?

In 1982, I bought a small house sitting on a big plot of land in Adelaide for A$500,000 (S$575,000). I tore down the house and built eight bungalows on the same plot. It was named Claire Court, after my daughter, who was born in 1983.

However, it was a nightmare when the interest rate for the bank loan spiralled to 22.5 per cent from 14 per cent in 1983 due to the worldwide recession. I subdivided the land and sold the bungalows after five years, and managed to break even.

Q: And your best investment?

I invested a six-figure sum in an Australian commercial real estate investment trust fund in the late 1990s. It achieved 15 per cent returns every year so my capital sum doubled. I cashed out of the fund in 2004.

Source : Straits Times - 12 July 2009

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