http://www.businesstimes.com.sg/prem...ients-20121213

Published December 13, 2012

Unbiased real estate views for rich Citi clients

Special service for Citigold Private customers

By Siow Li Sen


CITIBANK is offering unbiased views on property investment to wealthy clients as part of a holistic service, as it tries to stand out from the crowded private banking business.

"We found when dealing with customers ... property always comes up in the conversation; what they're looking for is unbiased advice," said Shrikant Bhat, Citibank Singapore head of wealth management.

Speaking yesterday at the launch of the real estate wealth solutions for Citigold Private clients, he said property investment is a core asset that accounts for a third of client portfolios.

Citigold Private serves customers with a minimum net worth of $1 million and has a market share in the "teens", said Mr Bhat.

Singapore has the most millionaires worldwide, in terms of density; 17 per cent of all households here have more than US$1 million in private wealth or 188,000, up from 165,000 in 2010, according to the 2012 Boston Consulting Group wealth report.

While wealth continues to grow at a strong pace in this part of the world, and is estimated to expand at a double-digit rate for the next few years, the pressure to provide more services is intense as banks fight for market share.

Citigold Private is adding a lot of services including institutional funds, big ticket insurance products, hedge funds and now real estate solutions, said Mr Bhat.

The bank is able to offer property market updates as it sees deals flow on a day-to-day basis, said Yvonne Siew, Citi Private Bank head of Asia real estate.

"We see where the transactions are," said Ms Siew.

"We can offer a sounding board to customers who come and say my broker is offering this and at this price, and (they) can check with us on actual transactions," said Mr Bhat.

On the bank's property market view, Ms Siew said the market is supported by the economy and low interest rates with genuine buyers driving demand.

She sees value in the smaller offices, usually referred to as strata offices as the demand there is by entrepreneurs for their own office needs.

Strata office prices have risen strongly, some almost doubling from two years ago to about $2,000 per sq ft.

Most office space are owned by real estate investment companies so supply is limited, she said.

"It's a value proposition," she said.

Buildings which still have strata offices for sale include Suntec, Chinatown Point, The Central and new launch The Index in Tanjong Pagar.

As for residential property, Ms Siew said investors have to be very selective.

"The reality is that no one is going to buy to sell in the next five years," she said.

"We encourage taking a long-term view," she added.

The government has slapped more stamp duties on buyers to cool the residential property market, with foreigners the hardest hit.

Foreigners buying in the posh districts of 9, 10 and 11 shrank dramatically, and among its clients, it's "less than a handful", she said.

Official data showed that in Q3, fewer than 100 homes were bought by foreigners in the three wealthy districts.

With more new homes coming on stream, rental yields are expected to fall next year to below one per cent for the most expensive homes, of at least 3,000 sq feet in size, she said.

Current rental yield is 1.5 per cent for good class bungalows and 2-3 per cent for residential properties in general, she said.