Dec 24, 2010

[B][SIZE="5"]High-end homes lure institutional investors[/SIZE][/B]

By Esther Teo

INSTITUTIONAL investors have become more active in the high-end home market, with the segment trading at a discount to its peak.

The Straits Times understands that 20 units at Paterson Suites were snapped up by Singapore-based investment fund Real Estate Capital Asia Partners (Recap) last month at an average price of $2,700 per sq ft (psf).

Recap is believed to have paid $118 million for the 20 four-bedroom apartments across the 2nd to 21st storeys with a total strata area of about 44,000 sq ft.

The price represents a discount of about a 10 to 15per cent on what the units would have cost individually, sources said.

The fund's substantial purchase has helped boost total sales at the high-end condo to 64 out of its 102 units as of last month. Bukit Sembawang's Paterson Suites was launched in 2007 and completed in the third quarter.

Property consultancy Savills is believed to have brokered the deal but could not be reached for comment yesterday.

Recap - headed by Mr Suchad Chiaranussati, who is married to a niece of City Developments executive chairman Kwek Leng Beng - is said to have recently sold 20 apartments at the Sui Generis freehold condominium in the Balmoral area for around $95 million or $1,935 psf.

The buyer of the Sui Generis apartments is understood to be Singaporean billionaire investor Peter Lim, who also purchased Thomson Medical Centre in October.

The Straits Times previously reported that 38 of the 41 units sold in total at Paterson Suites last month were bought by a handful of private investors. The 41 units sold at a median price of $2,661 psf last month.

The 20 units that Recap bought were part of the 38 units sold.

Experts believe that increasing interest in the high- end apartment segment is likely to be due to prices of such homes languishing below their 2007 peaks, providing an opportunity for capital gain. Also, the Singdollar, which is expected to strengthen further, provides investors with an opportunity for currency gain, further sweetening the deal, they added.