AIB Private Banking launches pan-Asian property investment opportunity

MichaelDes

Registered User
Messages
431
FinFacts. See here for - More information

Feb 29, 2008 - 1:34: PM.
"AIB Private Banking has launched a pan-Asian property investment product, AIB MT Fund Asia Private Ltd., offering individual, pension fund and corporate investors an opportunity to participate in the growth of the Asian property market. AIB is targeting an internal rate of return in excess of 12% per annum over an expected term of eight years. It will offer AIB investors access to a diverse range of properties from commercial to residential across a growing economic region, in developed Asian economies such as Hong Kong, Taiwan, Singapore, Japan and South Korea, together with emerging Asian economies such as China India and Vietnam".

This is AIB's second launch in the Asian property market. The first "Alpha Pan Japanese Fund" seemed interesting but the charges were very high. So has anyone got any opinion on

(i) The choice of the investment strategy in Pan Asian Fund. Medium term does it represent a good investment. Are property values and fundamentals attractive?

(ii) Will these be affected by the credit crunch?

(iii) Most importantly - how is the original Alpha fund doing [launched March 2007]?

The "Pan Japanese fund" was over subscribed. Anyone invest in it? Anyone have information on how it is performing? In my opinion this will be the benchmark for the new fund. By contrast Oversea's property mall paints a somewhat bleak picture on Japanese property market

Wednesday, September 12th, 2007.
"The Topix Real Estate Index had fallen 27% since 10th June as investors worried that problems in the US market would mean that foreign investment in Japan’s property market would dry up. So where is the Japanese real estate market heading? The Japanese angle on the problems in the financial markets is different in important ways. For example, the Yen carry trade, which has been so important for private equity investments, is probably coming to an end, and thousands of Japanese investors switching back to their own currency could be a good thing for the country’s real estate sector (they certainly weren’t going to buy any of it with New Zealand dollars). This could also start to benefit from the characteristic Japanese saving habit if higher interest rates make the Japanese feel richer and more confident. Even in the middle of last month’s panic the Tokyo office vacancy rate fell to 2.98%, it’s lowest level for 15 and a half years".

Good idea but do they have the experience within these markets to make good choices and are the timing now right?
 
http://www.finfacts.com/irishfinancenews/article_1012768.shtml



(i) The choice of the investment strategy in Pan Asian Fund. Medium term does it represent a good investment. Are property values and fundamentals attractive?


Good idea but do they have the experience within these markets to make good choices and are the timing now right?

The experience and knowledge of the different markets would be the key to the success of this. All of those markets are very different on a number of different levels politically, legally, growth, economic strength and stability.
Also the commercial and residential markets are really two opposite sides of a coin.

Residentially china is not the place to invest right now, but commercially there is more disposable income in the country so if these funds are investing in shopping centres I would expect good success. I would have similar thoughts on Vietnam.
India's residential market is booming, Honk Kong and singapore have both thriving commercial sectors.
Keppel Corporation Ltd are involved in Asia, they are reputable company around asia, and I would be confident in them being able to choose the right areas to invest.

Minimum investment is $200,000, I wonder what kind of return they actually guarantee. because if they aren't guaranteeing something then your assuming a lot of risk. You could independently purchase some real estate in asia through a finance house in singapore, hong kong, developer or agent, and not only get the same high yield but also own the asset.


www.sansonanddunne.com
 
I do not profess to know a great deal about these markets, with perhaps the exception of Japan. My knowledge of Japan is only based on reading articles though.
Cracking post GDE, you clearly know your stuff. Do you know what level of profit developers are clocking up in these markets?
200 grand US is not exactly small change and bearing in mind that developers are out to score 20% mark up in Western Europe and 40% in Central Europe, I am not sure if 12% per annum is overly generous.
 
I do not profess to know a great deal about these markets, with perhaps the exception of Japan. My knowledge of Japan is only based on reading articles though.
Cracking post GDE, you clearly know your stuff. Do you know what level of profit developers are clocking up in these markets?
200 grand US is not exactly small change and bearing in mind that developers are out to score 20% mark up in Western Europe and 40% in Central Europe, I am not sure if 12% per annum is overly generous.

The profit levels would be quite similar over here for developers - in the developed markets around 20-25%, and ranging from 20-40% in the 2nd world areas. Costs can vary hugely depending on contractors used. In a place like the Philippines Local small contractors can be as much 33% cheaper then a major player, but the quality of their work is suspect at best.
Your right a 12% return is not overly generous, but in the context of the irish market it sounds great. 7-8% is a good yield in europe, so 12% sounds fantastic. Its really nothing in asia though. Im developing a holiday resort at the moment, and gross yield on the cheaper units is expected to be 15%. You would think with those kinds of potential returns investors would be flocking in from asia, but there are so many companies in China and Singapore guaranteeing 20% on investments that 15% would be considered good but nothing spectacular.
I would imagine AIB and their partners are pulling in twice that 12%.

In the last week Ive seen two significant financial companies, one in japan and one in the US, announce expansion across asia in the real estate sector, so this AIB thing is very interesting indeed. with the US and europe over priced and underperforming asia seems to be the focus now. Will be very interesting to see over the next few weeks and months are any more major players expanding operations and products over here


www.sansonanddunne.com
 
Back
Top