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SC Capital Partners plans to raise US$400 million (S$537.6 million) to set-up a property fund focusing on the Asia Pacific region, according to a report from Bloomberg.
The Singapore-based property fund manager will begin seeking global institutional players to invest in the fund starting next week, said its Managing Director Suchad Chiaranussatti.
“We are looking to provide long-term appreciation in the Asia-Pacific, which will be the main economic driver in the world,” he said, adding that the fund is expected to rake in a net return of around 10 percent.
Specifically, 80 percent of the fund’s will be invested into transparent and liquid markets, such as Singapore, Japan, Australia, Hong Kong, South Korea and New Zealand. The remaining 20 percent will be funnelled into China, Taiwan, Malaysia, Thailand and Indonesia.
SC Capital Partners has already invested around $250 million (S$336 million) of the $850 million (S$1.14 billion) it collected earlier this year for its fourth fund, with most going into Australia. By year-end, it intends to invest another amount up to US$400 million from that fund.
According to Chiaranussatti, its present investments can result in yields of as low as 6.7 percent in Tokyo to as high as 10 percent in Australia.
Queried about investing in Chinese properties, he said China has many assets that appear cheap, but many don’t generate yields or provide low returns.
Nevertheless, yields for Chinese commercial properties are forecasted to increase to 8-10 percent from 4 percent currently amidst the slowing construction activity, with developers slashing their price expectations.
Nikki De Guzman, Editor at CommercialGuru, edited this story. To contact her about this or other stories email nikki@propertyguru.com.sg
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