US properties increasingly popular with S’pore investors

Local developers taking stakes in American projects, while those from the US have set up shop here to attract investors
Published: 4:02 AM, September 10, 2014

SINGAPORE — The real estate market in the United States has become one of the latest contenders for a slice of Singaporean investors’ growing interest in overseas properties, joining the ranks of traditionally popular markets such as Malaysia, Australia and Britain.

In recent months, Singapore developers, including Keppel Land and Pontiac Land, have flocked to the US, taking stakes in American projects as they seek alternative sources of revenue amid a lacklustre market back home.

On their part, US developers, including Millennium Partners, have also set up shop here, in an attempt to attract more individual investors for their properties in the States.

“We first came to Singapore and a few other Asian cities in 2009 to market our project Millennium Tower in San Francisco … We’ve seen interest grow and our hope is that it will continue to grow; that’s why we’re here,” said Mr Richard Baumert, a partner at Millennium Partners. Mr Baumert was in town to kick-start marketing for the company’s latest project — Millennium Tower in Boston.

Overseas properties are becoming increasingly popular with Singapore investors, who face tough property curbs and high entry prices at home. The Monetary Authority of Singapore said Singaporeans poured S$2 billion into foreign properties last year based on deals done by real estate agencies here, a 43 per cent increase from the S$1.4 billion invested in 2012. And analysts said this figure could increase further.

Mr John Stinson, Cushman and Wakefield’s executive managing director of capital markets in the Asia-Pacific, said: “There has been an overall surge in interest from the Asia-Pacific in investing in the United Kingdom, Europe and the US for almost two years. This trend has really gathered momentum from Singapore and other parts of South-east Asia this year. Many investors with portfolios highly concentrated in Singapore … are executing strategies to diversify offshore.

“The US has reached the top of many investors’ target lists of offshore country targets. The markets showing the most appeal have been New York, San Francisco and Los Angeles ... The US markets are generally coming off a low base in almost every sector; interest rates are historically low and the US dollar has again become a safe-haven currency.”

Mr Sean Tan, general manager of real estate portal iProperty, agreed that the US is emerging as a viable investment destination, especially among investors who are seeking a diversified portfolio, but noted that its popularity still pales in comparison with that of Malaysia, Australia and the UK.

“As with any investment, there are risks. The US is so far away; investors may not be familiar with the market so they may buy into areas that are not so good … but cities such as San Francisco and Boston are not bad as their economies are quite promising.”

Mr Tan also said overseas developers are drawn to Singapore for its status as a regional hub and gateway to affluent individuals in Asia, a sentiment that Mr Baumert shares.

“We have two more projects coming up after this one, so we thought we should just set up an office here. We started in summer, so that’s around June. From a branding perspective, it also helps to tell people that we have a presence in Singapore,” said Mr Baumert.